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Weekly Market report - 31.05.21

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

Current situation (unchanged)

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).

With the continuation of the fall in market last week, we have reassessed the structure and we now propose a major cycle has ended, truncated, at 64,854.00 all-time high dated 14/04/2021 from March 2020 low at 3,782.13. From the top, we now see a sharp corrective in a three waves pattern and while the correction was fast, the direct drop into the expected 41,731.58-30,808.15 is enough to end the correction.

We need to see a confirmation in the RSI but in lower time frames, we can already call the end of a cycle from the all-time high. From 30,000.00, we should now see a at least 3 waves structure to the upside or new highs.

What to expect this week

Bitcoin is lingering in dangerous zone above the 30,000 low from the previous week and we see no sign of recovery so far, Sentiment in weekly is neutral but daily view settled in bearish territory. So we are neutral and despite having taking long again last week, we will not hesitate to get out at the sight of bearish confirmation as the welcome bounce last week could prove disastrous in case of a new low.

Short-term, above 40.850 short-term bearish pressure would be relieved to aim at around 44k to confirm the end of a cycle from 59,415 high but really until we break back above all-time high or se see a bullish structure in 12h view, we prefer to stay away at that juncture from swing trade and would be happy with our current long.

Below 30,000, situation deteriorates and no real floor between here and sub 10k. We don’t like to sell short crypto and therefore we would stay on the side line.

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