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The cryptocurrency market is volatile and can change on a dime. Recent breakouts in Chainlink, FORTH, and others have been temporarily paused by the stalling out of both Bitcoin and Ethereum even as other alt coins had made sizable recoveries since the correction. Bitcoin has since pulled back to under $35,000 USD and Ethereum pulled back to under $2500 USD.
Bitcoin & Ethereum Pull Down Market
The technical picture on Bitcoin does look a bit messy at the moment. When looking at the daily chart, Bitcoin has actually fallen below the 200 day moving average, retested it, and then continued below that level. It has, however, seemed to find a bottoming-out level on the MACD well below zero. I believe this is the range in which Bitcoin may consolidate and stick in for the time being.
Bitcoin is still hanging out around the January 2021 highs and lows. If Bitcoin manages to cross over on the daily MACD, it should fly up through these current levels. When examining the 30 minute chart, it is pretty evident that Bitcoin has since continued sideways since the initial sell off bottomed out back on May 19th. It has since been trading right around the 200MA trend line.
Based on this chart, this appears to be the range in which Bitcoin may stay in for a bit. The top being around $42500 USD currently and the bottom being that $30,000 USD Bitcoin hit on May 19th. This sideways momentum, even temporarily, is actually good news for alt coins holders should Bitcoin remain around these levels and does not break down further.
Ethereum is a whole other monster currently in the cryptocurrency market. Unlike Bitcoin, Ethereum never even broke its bullish uptrend on the daily chart, although it still has not officially bottomed on the daily MACD. The ideal situation with Ethereum would be another bottom / retest of the 200MA on the daily chart and then using that support level as a nice bounce back into an uptrend.
On the contrary, the 1 hour chart paints a much more optimistic picture on the short term outlook of Ethereum. ETH did actually test the 200MA on the daily back on May 24th as visible within the red circle drawn on the chart above. Should this be the only retest of this level, if ETH can get back above the 1 hr 200MA, then it has massive bullish upside all the way up close to the $3000 USD range.
Ethereum did break above the 1 hr resistance level briefly, but has since fallen just below the level since. It does appear that selling pressure is beginning to level off. This means that Ethereum could either go into a short period of consolidation as the market bottoms officially and upward momentum can begin to rebuild as we enter into June 2021.
Chainlink & Forth Experience Pullbacks
If you read my previous article on these two coins, Chainlink had recently just made an absolutely massive 99% run up off the lows. This level of move upward was indeed followed by a sizeable pullback, as expected. Chainlink topped out around $35 USD per LINK , which actually allowed it to test the resistance level of the 200MA on the 2 hour chart, as seen below:
While LINK did get rejected initially off this level, this is a very healthy pullback. Chainlink absolutely blasted through the 1 hr 200MA trend line during that 99% run. Now LINK has traced back to the very level on the 1 hour and is actually now using it as support. This is why I mentioned in my previous article to expect a pullback for LINK from $35 to the $27 range.
So long as this new support does indeed hold, it can be expected that Chainlink will once again retest that 2 hour 200MA resistance line for another chance to break through. If that resistance is broken, LINK can start to push back towards the $40 USD range that was lost during the sell off earlier this month.
Last but not least, FORTH, the governance token for Amplforth, has actually been a pleasant surprise these past several days. After a large run up from the lows, FORTH has also experienced a pullback similar to LINK. FORTH is actually holding the 1 hour 200MA trend line impressively well and actually looks to continue to move up today as it is currently fighting to get back into the $20 USD range right now as I write this.
With this new level acting as support, even with Bitcoin moving down, FORTH has the ability to potentially build on this momentum and retest the top the 2 hour 200MA resistance level with a chance to head back to $31 if that level is broken. This last point can be taken with a grain of salt, but FORTH, based on the price chart data that I have, is crossing over the daily MACD technically for the first time ever since its initial launch. This could paint the picture for the future returns coming in FORTH as it continues to grind up from the lows.
Closing Comments
While some are panicking due to the slowed momentum of Bitcoin and Ethereum, please note that the market is still technically bottoming out from the massive selling pressure downward during the market correction. As these levels continue to bottom and flatten out, coins will have an easier time building consistent, upward momentum as the cryptocurrency market reenters a bull trend and we continue into summer.
I have analyzed Bitcoin and Ethereum here as they are the biggest market cap coins currently in crypto. Chainlink and FORTH have been my other go to coins recently as they are some of my bigger holdings and I expect to make the largest returns over the long term in those two coins. If you have other alt coins that you would like me to take a look at, please drop them in the comments! I would be more than happy to give them a look. I plan on looking at Ethereum Classic, Polygon, and others in the close future.
As we move into June, the direction and success of different coins will begin to slowly become more and more recognizable. For now, I suggest sticking to the charts, playing the market safe, and all the while having confidence in your own ability to make sound investments. Remember, I am no expert, I just trade what I see with the information I have access to. I have made some correct calls and I have made some wrong calls over the past few years. I just really love doing this.
Previous article: https://www.publish0x.com/cryptothink/chainlink-and-amplforth-make-big-moves-in-the-market-xjmkrdg
Bonus Note: I know the topic of AMPL & FORTH has been a little more controversial as it is such a new project. Obviously I am a supporter of it, but only because I truly believe in the potential economics of such a system. That said, because it is so new it is obviously an extremely risky investment compared to the blue bloods of Bitcoin, Ethereum, and others. So, just something to keep in mind. Thanks guys!
- Zacharias
This isn't financial advice. While I aim to provide my insight as accurately and bias-free as possible, please do your own due diligence before choosing to invest in anything, including the coins discussed above.
