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Weekly Market report - 04.06.21

What our traders have to say about the cryptocurrencies' market.

Current situation

The Crypto market is led by bitcoin and for us to appreciate this market as a whole, we will consider bitcoin as the reference for the general analysis to understand where this market is heading from a technical perspective.

Since inception, bitcoin reached 17,798.68 high on 17/12/2017 in a five waves structure that was calling for a continuation higher after correction. This correction from the 17/12/2017 high took one year to complete down to 3,156.26 low to start a new cycle higher. The first leg of this cycle brought bitcoin to 13,970.00 high on 26/06/2019 in a three waves pattern that bulls could not convert into a bullish structure and from there we saw a deep correction to 3,782.13 low on 09/03/2020 (that we consider as an aberration event following covid-19 breakout as we initially called for the end of the correction on 18/12/2019 low at 6,435.00. By that time, we were waiting for signals to resume swing trades that did not come until early April in our system).

From the 13/03/2020 low at 3,782.13, we propose the cycle ended at 08/01/2021 41,950.00 low with the uncanny following correction to possibly end at 28/02/2021 43,000.00 low to resume the trend higher. However, at the moment, there is no confirmation and we could still see a continuation lower after the coming bounce in at least a three waves structure as the cycle from 21/02/2021 58,8352.80 high is now completed to the downside.

So, while our system is now calling for a move higher as explained above, we want to be very cautious with our long from 35k and possibly scale out our position to avoid a further correction. We would then jump into the position above 58,352.80 on any pullback.

What to expect this week

Last week pullback was too fast and too deep and price found some support at the 43,000 mark. From there, we should see at least a three waves move to the upside to challenge all-time high. Failure to break above would threaten the alternate scenario explained in the main view.

For now, we focus on ADA that has a clearer structure in the daily view and that might show us the path higher. The only interest in bitcoin would come from a bullish structure on lower time frame for a short-term trade and see from there how the 58,352.80 pivot holds.

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