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We are pleased with Bitcoin's price action and think BTC will likely lead the way.
It will likely take time for ETH and SOL to catch up to BTC, and then there will be some more time for alts and memes to catch up to ETH and SOL.
For now, we remain concentrated in the barbell portfolio until overall market liquidity improves, which we expect to happen in Q3.
TLDR
- Bitcoin (BTC) has broken out of its bull flag pattern, and the outlook is positive for further upside movement, potentially led by positive Nvidia earnings.
- Ethereum (ETH) is showing signs of a bullish reversal. The key level to watch is a breakout above $3,160 and the main downtrend line.
- Solana (SOL) has broken out above $152 but may face resistance at $180, with a potential pullback to $160 to flush out some leverage.
- Meme coins like WIF and POPCAT are facing challenges, with WIF potentially retesting the $2.00-$2.23 zone and POPCAT needing to reclaim the $0.40-$0.46 range for a bullish recovery.
- While BTC and ETH are showing strength, we remain cautious about the prospects of meme coins in the short term -expect more choppiness and potential downsides.
Disclaimer: This is not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results.
BTC
This week has been quieter on the macro data front. The greater emphasis on the macro front will be Nvidia earnings on Wednesday. Other than that, trading should be cleaner for Bitcoin and crypto and more dominated by mechanics.Open Interest (the amount of leverage) has increased relatively considerably over the weekend. OI is up from $28.45b before the weekend to $32.59b today. The OI highs in March were at $36.31b. This should put into perspective how swift the increase was and by quite a large amount over the past weekend.
However, the Funding Rate is at 0.005%. This suggests there is relatively even positioning between Longs and Shorts.
Ultimately, one of the sides (Longs or Shorts) will likely be flushed out over the coming couple of weeks. I (Tom) feel that shorts will be flushed out as BTC's price moves higher.
Technical analysis
- From a TA perspective, BTC looks good here.
- Price has done really well to break out of the bull flag structure that it has been in for the last two months or so.
- What we'd like to see here is for price to close above the top border of the bull flag and use that border as support, like it did over the weekend.
- To the upside, there is horizontal resistance at $68,900, which may see an initial rejection and a slight pullback in price, to say, the $67k area before a retest of $68,900 can be had again.
- If price does break down, then the key level to hold is the $63,400 area.
- The RSI remains in the middle territory on all major timeframes except the weekly, where it is just shy of reaching overbought territory.
Cryptonary's take
Overall, we're positive here, having seen Bitcoin break out of the bull flag pattern that it had formed and had been in for a few months.Bitcoin is now in a tighter range between the horizontal resistance at $68,900 and the support, which would be the top border of the bull flag (pink line).
Ultimately, we expect Bitcoin to continue moving higher in the coming weeks, even if it's not an explosive move. Positive earnings for Nvidia on Wednesday could help fuel this.
ETH
ETH's Open Interest increased quite significantly over the weekend to $11.15b today having been at $10.12b before the weekend.However, the funding rate is relatively clean at 0.007%, meaning that there is close to even positioning between Longs and Shorts.
This is still quite a healthy setup despite Open Interest increasing by 10% over the weekend.
Technical analysis
- ETH has been in really choppy waters recently. However, we're beginning to see it potentially make a more meaningful move higher, having held the horizontal support of $2,875.
- ETH has broken out of its local downtrend line and is close to pushing up towards the main downtrend line (red lines). A breakout of the main downtrend line would likely indicate the start of the bullish reversal.
- There is a local resistance at $3,160. A breakout above this level, paired with a breakout of the red downtrend line, and it would be time to get bullish ETH.
- To the upside, the main horizontal resistance overhead is at $3,485, then beyond this, $3,967.
- The RSI has substantially reset on all major timeframes, giving ETH the room to potentially move more dramatically higher.
Cryptonary's take
ETH has generally been registering lower highs and lower lows, which is usually not positive going forward.However, ETH has done well in holding the horizontal level of $2,875, and now, with what looks to be a cleaner and clearer macro environment, we may be beginning to see the start of the catch-up trade for ETH.
The full bullish reversal comes on a breakout above $3,160 and a breakout of the main red downtrend line.
SOL
SOL's Open Interest increased substantially over the weekend from $1.62b to $2.33b today. This is quite a large increase in just a matter of days and something that we should perhaps be wary of.SOL's Funding Rate sits at 0.008%, which means there is quite an even balance between longs and shorts.
Even though there is a relatively even balance between longs and shorts, it wouldn't be a surprise to see some of the added leverage be shaken out over the next week. If SOL does pull back to $160, this may flush out some of the late Longs.
Technical analysis
- For the last month, SOL was mostly in a tight range price-wise, between $131 and $152. However, price broke out over the weekend and has now pushed into that underside level of $180.
- On the downside, the $152 should be at a horizontal support level.
- It's possible that price now may be range bound between $152 and $180.
- The RSI had reset on all major timeframes but is now pointing upwards, and on some timeframes, it isn't too far off of overbought territory.
Cryptonary's take
While we're really pleased to see SOL break out comfortably of the $152 level, we do see $180 as horizontal resistance that price may and seems to have rejected from in the short term.In our opinion, this may lead to a slight pullback to the $160 area in the short term, with prices remaining range-bound between $152 and $180 for the upcoming weeks.
WIF
- As we provided in our last update, WIF has been range-bound between $2.23 and $3.41 for well over a month now.
- There was local horizontal support at $2.75; however, this was broken to the downside, and the price bounced and is now retesting the underside of this $2.75 level.
- If price rejects at $2.75, then it's possible that it will retest the $2.00 to $2.23 area.
- However, even though the chart does not look super positive from a TA point of view, we do note that sentiment is very bearish, and usually, sentiment should be faded.
- A full bullish reversal would be if price broke out above $3.41. If we get that in the upcoming weeks, then we'd expect to see a retest of $4.50. However, we don't see price moving dramatically higher in the very short term.
Cryptonary's take
In complete honesty, it's difficult to predict WIF here despite being very bullish on BTC, ETH, and SOL (although it is possible we see a $160 retest first before more upside for SOL).WIF and other major memes do not look that brilliant charting-wise. We think the most likely outcome here in the short term is for WIF to retest the $2.00 to $2.23 zone, where we'd want to see price bounce from that zone.
If not, then expect $1.50. If WIF were to get anywhere close to $1.50, we would relatively aggressively bid it. But, as mentioned above, WIF is difficult to call here.
POPCAT
- Like WIF, POPCAT seems to have lost local support at the $0.40 level, but price managed to bounce nicely from the old demand zone between $0.32 and $0.34.
- Price has now retested the underside of $0.40 and has seemingly rejected for now. If POPCAT wants to see more substantial upside, this is a critical price point to reclaim.
- What we do note about POPCAT is that price is relatively close to the red downtrend line. A breakout of this downtrend line could see price attempt back up to $0.47 and then $0.53.
- A breakout of $0.53 to $0.55 would ignite the full bullish reversal and likely see a retest of $0.70. However, this currently feels somewhat of a long way away.
Cryptonary's take
POPCAT is currently in a tricky spot, well below the key support zone between $0.40 and $0.46. If it is to have a bullish recovery, Popcat needs to reclaim this area as support.Like WIF, POPCAT is tricky to call in the short term. What we would say is this: just over a month ago, POPCAT was at $0.10, and we still believe that in 3-6 months' time, these bluechip memes will be substantially higher.
In the short and medium term, we'd want to see the $0.32 to $0.34 area defended and for price to ideally get back into the $0.40 to $0.46 range before attempting to break out of the $0.53 zone.
But currently, we do expect more chop and potentially more downside.
Let's see what we get. For now, I (Tom) am personally holding and not looking to chop in and out of this.
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