Technical analysis

The drop would be behind us on the crypto market! Really?

Julien Moretto – 8 Apr 2020

We are entering a week that could be decisive for the rest of the year in the crypto market. Bitcoin has just broken up the resistance at €6,600 ($7,200) but buyers are not showing any particular strength in the market and the uptrend is not really being followed. By midday on April 8, Bitcoin was trading around €6700 ($7,300), with a 13% increase over a week.

While Altcoins have been more bullish than Bitcoin for the past few days, the halving of Bitcoin Cash takes place on April 8. A possible price reaction is to be watched.

All this in a context related to COVID-19, where the correlation between the cryptocurrency market and stock market continues. The world’s main financial markets continued their recovery this week, apparently reassured by a gradual return to normal in China and a slowdown in the number of new infections in Europe.

We are therefore seeing positive signals, but given the unpredictability of this crisis, caution is advised. Let’s analyse together the price levels to watch and the next decisive dates.

  • According to CoinGecko, market capitalization is rebounding nicely to $208 billion, up from $176 billion seven days ago.
  • Bitcoin’s dominance in the market declines to 64% from 65.4% last week.
  • Ethereum (ETH) delighted investors with the week’s best performance in the top 20: +28.9%.
  • Correlation between Bitcoin and the stock market remains at historical highs

We invite you to discover ou analysis in video (recorded on april 7, in french) :

Bitcoin (BTC)

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Coinhouse’s Recommendation : 
Partial profit-taking

  • Yes, Bitcoin broke through the €6,600 ($7,200) level which was a significant resistance, corresponding to 50% Fibonacci retracement of the sharp decline from February 13 to March 13. But no, buyers didn’t take advantage of this to set up a big bullish move, which still shows a weakness in the market.
  • So we’re entering a potential reversal zone. Between €6,600 and €7,300 ($7,200 and $8,000), the price is between the Fibonacci retracement levels 0.5 and 0.618, which are zones that often cause a market reversal. Between April 8 and April 12, the current rise will also be equal in time to the previous decline from February 13 to March 13. For these reasons, we recommend taking partial profits for those who bought Bitcoin on lower price levels.
  • If the reversal is confirmed in the coming days, two price levels are to be watched. First the €6,500 ($7,000) and then the €5,900 ($6500). In the last few days, these price levels acted as a support. If the price breaks them lower, these will be sell signals that will indicate a return to a more pronounced downtrend.
  • Of course this reversal can be invalidated. But buyers will have to show strength by April 10 or 12. The price will have to move up to €7,300 ($8,000), then consolidate on these price levels before breaking $8,000 higher. Such a scenario will be conducive to strengthening buying as it would mean the installation of a long-term uptrend.

Ethereum (ETH)

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Coinhouse’s Recommendation : 
Partial profit-taking

  • The price of Ethereum (ETH) performed very well this week: +26.4% to jump around €155 ($170) on April 8.
  • Last week, we were buying as long as the key support level of €110 ($115) held. A strategy that has paid off and even exceeded our expectations, with the price moving above the €145 – €155 ($150 – $160) pivot.
  • Ethereum’s price could now push higher and reach the €165 to €185 ($180 to $200) zone. This zone should be a difficult resistance to break up and is located around the 0.5 Fibonacci retracement level of the previous bearish wave. But as Bitcoin is at risk of a bearish reversal, we advise to take partial profits now.
  • Of course, if the rise continues and the $200 level is broken up, we will have to strengthen purchases. Conversely, the €145 to €155 ($150 to $160) and then the €110 ($115) supports should be maintained to hold the uptrend. Their break down should be interpreted as selling signals.

Bitcoin Cash (BCH)

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Coinhouse’s Recommendation : 
Wait

  • Bitcoin Cash (BCH), offered a very nice increase over the week with +28%, to €254 ($278) on April 8. We are analyzing Bitcoin Cash this week because its halving (division of the money issue by 2) is taking place on the day we write this article. This is an event that can potentially trigger high volatility on this asset.
  • From a technical point of view, we should not forget the fact that Bitcoin Cash suffered more from the February/March decline than either Bitcoin or Ethereum. The rebound it has been offering for the past month has simply allowed to retrace 40% of the previous decline. The current price range of €245 – €260 ($265 – $285) is a pivotal zone, so a former support now acting as a resistance.
  • If the halving event triggers a break up above the $285 level, then a bullish trend will be confirmed in the short term. On the contrary, if the halving event becomes a bearish catalyst, the price of Bitcoin Cash should return to seek support at €208-€212 ($220-$225) first. If this support is pushed down, it will be a sell signal. Given the uncertainty surrounding this halving, we advise waiting for the market to give a clearer direction before intervening.

Top & flops of the week (top 50 marketcap)


Tops

1- Bitcoin SV (BSV) : +34%
2- Ethereum (ETH) : +28,9%
3- Bitcoin Cash (BCH) : +28%


Flops

1- Leo Token (LEO) : -0,5%
2- WAVES : +1,7%
3- Augur (REP) : +4,2%

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Latest crypto news

  • Ethereum is gradually entering traditional finance.
    The company Fatburger has issued $40 million in debt securities in a tokenized form on Ethereum. Morning Star, a highly influential asset management firm, rated the securities issued by Fatburger. Morning star explains that the increased transparency provided by the Ethereum blockchain has allowed it to become more efficient.
  • Paradigm strengthens its position on MakerDAO.
    As a reminder, the Maker Foundation has launched an auction for the issuance of new MKRs. The money collected in DAI was used to bail out a “hole” of more than 5 million DAI that was caused by the crash of March 12. 20,980 MKRs were thus added to existing traffic at a price of 5.3 million dollars. 3.6 million came from the Paradigm Fund. The MKRs left at an average price of $296.35. Paradigm is one of the largest crypto funds in the ecosystem. They now hold 3% of the outstanding MKRs and are once again showing their support for the project.

Investors’ attention is drawn to the fact that the content of the articles does not constitute investment advice.
Investment in cryptocurrencies carries a risk of total capital loss.
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