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Weekly Market report - 17.05.21

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 an uncanny following correction that has been dragging the price higher for few months and until now as an expanded ascending triangle took support at 28,850.00 low dated 22/01/2021 and then 43,000 low dated 28/02/2021. From there price reached a new all-time high to 61,844.00 on 13/03/2021 and we were expecting the last leg of the triangle lower in the range of 53,000-47,000 to buy for long term position. Price reached as low as 50,427.54 before bouncing. While we were calling the cycle from the latest high at 61,844.00 to this latest low, we were keen to propose the end of the overall correction from 08/01/2021 as price was reaching again a new all-time high at 64,854.00. We were then mentioning that we would need a confirmation in sentiment to break our pivot to the upside, this confirmation did not come and we have been deleveraging all our long positions on the 16/04/2021 as we were suspecting a correction.

As the dip from last week proved not to be completing the correction from all time high, we have to revise our view as bitcoin is entering bearish territory. As a replay of may 2013, we have to assess more correction to come into 2021. From current levels, bitcoin should bounce from 41,576.00-30,498.97 for at least a 3 waves structure to the upside before lower again.

Our daily pivot starts to fail and if we refer to our road map from inception, we should see more weakness after this bounce into the rest of the year. We will update next week after the bounce materialize or not.

What to expect this week.

ETH reaching 3,330.28-2,765.62 as our projected area in 3h time frame, we should see bitcoin reaching 41,576.00 at least for a bounce to the upside.

We monitor closely our long position still open but we do not feel like adding to our longs at current level. We like to see clear bullish structures from the above-mentioned area before jumping in and only for very short-term trades.

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