Jan 17, 2021: Crypto market review

by | Jan 17, 2021

Disclaimer: Posts on the HyperTrader blog and associated HyperLinq websites are for educational and informational purposes only. These posts should not be taken as financial advice, nor are they meant to be viewed as trading advice. HyperLinq Inc. or the authors take no responsibility for any damages or losses.

With this review, we will take a closer look at Bitcoin, where it is right now, and possible scenarios. Additionally, we will take a closer look at altcoins. As always, I will be starting with the macro perspective (monthly, weekly) charts, and then I will drill down to lower time frames.

So let’s start with a closer look at the price action for the king of them all.

BTC

BTC has hit the ATH at the level of $41,950 on Binance. This means that the price has doubled now, comparing the one from December’2018. Shortly after achieving this level, there was a selloff to $30,420. This is a -27,5% throwback. Since then, we are noticing a consolidation.

Does this make BTC bearish now? In my opinion, not yet. We still have not seen a market structure break.

The FIB

The following chart represents a FIB on a monthly chart; I have been using this method for a while. (A) and (B) are showing the start and endpoint of the FIB.

There are a couple of key levels to be noticed on this Fibonacci:

  • The price has found support at the 0.618 ($6,268) level and then rallied. This level is an OTE or Golden Pocket,
  • After the bounce, the price has breached the 0 Level ($10,854), found support there, and continued the run,
  • The same happened at the -1 ($18,274) level.

Now the price has reached the -4 ($40,534) level and got stopped there. The price is almost entirely in the midpoint between -3 ($33,114) and the -4 levels.

Support Levels

During a run like this, I am looking for support levels in case of a sudden drop. These points may also be used for long late entries or to add to your current position.

The daily chart below presents levels where the price should find support during the pullback.

These levels are ICT’s bullish Order Blocks, which BTC has formed on the daily chart. We can see that the 1st support level already did the job. The candle pointed with the arrow (1) dipped into this area and immediately bounced off.

In case of a further drop, most probably, this level will once again support the price.

If the reversal and further drop, the price should find support at the area marked as 2nd support level.

Arrows (2) and (3) point to the levels where the price has bounced off. They are confluent with the Fibonacci levels -3 and -4.

The Reversal

One of the questions that some may be asking is whether we are witnessing a reversal or maybe an intermediate stop before the further rally?

This is not the reversal yet, in my opinion. The market structure has not been broken, and BTC is making higher lows. On the other hand, it is under pressure now. It has to make a higher high to prove it is still bullish.

The following chart summarizes this and presents the bullish scenario.

The following charts present the reversal scenarios.

Institutional Levels

Current Institutional levels are: 

$45,000

$42,000

$40,000

$38,000

$35,000

The price has broken $40,000 and got rejected from $42,000 ($41,950 for Binance).

XRP

I am not going to elaborate on the controversies around XRP and SEC. A chart is a chart, and this is going to be a purely technical analysis.

I have mentioned that I am bullish on XRP, and I uphold this bias in my previous analysis. I think that XRP will pump significantly this quarter.

The following chart presents the level which, if broken, will invalidate this idea.

The Daily chart below presents the preferable support area for bullish continuation.

ETH

The throwback for ETH was relatively easy to predict. It was rejected from the last bearish Order Block guarding the ATH.

The pictures below present two charts:

  1. The bearish OB formed on 13/01/2018
  2. The reaction to it, from 11/01/2021

Amazingly the price has reached the same level almost entirely three years later!

The picture below presents the weekly chart with the same bearish OB. The levels are entirely respected.

Long term ETH/USD is still bullish. As for the future of the short term price action, the  ETH/BTC chart might answer.

The consolidation, which is marked by the orange box, should moderate the run for some time. I expect volatility around it for a couple of weeks. I don’t expect that it will be broken in one go, i.e., without any retracement.

This alt is a lot of fun, giving a lot of high probable entries. The picture below presents the current weekly price action with the range, which I have introduced in November reviews.

The price action analysis:

  • The range was formed on 11/23/2020
  • We can see that the price dipped to $8 levels, but the weekly candle closed within the range. 
  • Then we had another dip to the BUY ZONE followed by an immediate run to the top of the range (SELL ZONE)
  • The weekly candle dipped into the SELL ZONE and closed with the range again
  • This week the price found support at the Range EQ and blasted through the SELL ZONE, which became a SUPPORT ZONE now.

The Daily chart below presents a greater detail.

We can see how the Range EQ was necessary most of the time and finally did give the price strong support.

Founder & CEO at HyperLinq Inc.
Founder & CEO at HyperLinq Inc.

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