The crypto markets are behaving like an old Rolls Royce on its way to Windsor - coasting sideways in no particular hurry. After last week's nonchalance, more of the same looks likely for the week ahead.
We've started the week much where we were a week ago.
There was a little downward drifting during the week, but on decreasing volume - bears were clearly asleep (or busy buying bunting). On Saturday, while everyone was watching the wedding, volume dropped to almost nothing - probably not coincidence - and then there was a very relaxed bounce off the 50 day moving average (blue) on very low volume, so bulls were clearly also hung-over the next day.
In short, it feels like summer.
RSI is the only point of interest currently, in that it's testing the 50 level from below. A rejection here could be bearish, but with volumes so slight the market feels directionless.
Let's wind back the clock once again, and see how our 2014 comparison is going.
Comparing the two areas I've drawn boxes around on the 2018 and 2014 charts, we're still seeing similar motion since the kiss of the red 200 day MA - a move sideways followed by a test of the blue 50 day moving average.
As I touched on last week, the moving averages are a touch more bearishly-tilted currently, which explains the low volume sideways/down drift last week - but not enough for concern.
In 2014 at this point BTC rallied and had another go at the 200 bull/bear line (red). That could happen here, but the fact the 50 is heading sideways currently rather than upwards (as in 2014) means history could easily diverge here - although the RSI was also sub 50 in 2014 at this point, it doesn't have to win the 50 test this time.
In short, with so little volume, more sideways range-trading between the 50 and 200 lines seems most likely.
Should the test of the 50 RSI bull/bear line fail this time around, we could see a move out of this range and below the 50 MA - which would prompt a resumption of the bear market - so I'll be keeping an eye on that in case it materialises.
Ethereum has bounced nicely off the 200 day again, on the surface breaking out of a minor recent downtrend. RSI has bounced off 50 - so this all looks good. But, as ever the proof of the pudding is in the volume and there's virtually none yet, so this isn't a confirmed breakout yet.
Saying that, moving averages are pointing up, which coupled with the position over the 200 day makes this is a significantly more bullish chart than BTC.
Ripple really is in the doldrums - drifting along under every significant moving average with ever-decreasing volume and RSI locked at a bearish 43. Main hope for bulls is the angle of the MAs, which is slightly upwards.
A very similar story with Litecoin - volume dropping, drifting sideways under the main MAs. If this was a yacht I'd be thinking of starting the motor.
As I'm forever saying, TA is a windsock, not a crystal ball. Currently there's very little wind.
BCB Group has no position or opinion on the price of Bitcoin or any other cryptocurrency and this article should not be construed as analysis of or advice regarding the current or future market price of Bitcoin or any other cryptocurrency. No analysis of the price movements of BTC or any other cryptocurrency or any other asset provided by BCB Group should be construed as an invitation or inducement to buy, sell or otherwise to trade BTC or any other cryptocurrency.
Strategy and Execution Partner
Jon is BCB’s head strategist, with an emphasis on market intelligence. An expert in behavioural science and highly experienced chartist, Jon has been providing BCB’s clients with crypto and macro technical analysis since 2017, and has quickly gained a reputation for accuracy after correctly calling the December 2017 top and August 2018 bottom.
Jon is also MD of British music production company Poseidon. He began studying technical analysis in 2000 due to its overlap with behavioural economics – much used in Poseidon's international marketing work, which has seen the company achieve three iTunes US number one albums among other notable successes.