But beneath the headlines, key levels are being tested, divergences are forming, and opportunities are emerging for those who know where to look.
In today's report, we dive deep into the charts, dissect the latest market moves, and reveal the critical levels that could signal the next big shifts across multiple assets.
Note that we have also added a 'General Market Context' part at the beginning of today's Market Direction. This should help give a zoomed-out view of our current general view of the market, and we then use this context to help shape the Market Direction below.
Key questions
- Is Bitcoin's bounce to $60k the start of a new rally, or are we in for a choppy summer?
- What crucial price levels should you watch for WIF, and could its 60% decline present an opportunity?
- POPCAT's wild ride continues - but what key resistance level could signal its next big move?
- How might the unfolding US presidential race drama impact TREMP and BODEN's price action?
- RUNE's been on a downtrend since March - but could a bullish divergence be hinting at a reversal?
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.
General market context
In yesterday's market direction, we outlined that the majors were potentially set for a short-term bounce, although we didn't see a possible bounce of any meaningful size. We also said that $60k was the likely stopping point for Bitcoin.Since yesterday, we have seen Bitcoin bounce higher, test $59,600, and be sold into, with price now pulling back to $58,000. As Bitcoin approached the $60,000 level, you'd want to see strength be shown for BTC to reclaim $60k and then begin a push on to the next horizontal resistance at $63,400.
Unfortunately, this hasn't happened, and Bitcoin (so far) has rejected from the $60k area. We can still push higher again, fuelled by the bullish divergences that have formed. But, with lighter volumes throughout summer and with the Fed unlikely to cut Interest Rates before the September Fed Meeting, it's possible we still have July and August as a period of chop and even some more downside.
Although we're not sure we see substantial downsides from here, if there are more significant pullbacks, we'd be buyers of them.
WIF
- WIF has been in a relatively straight downtrend now since late May, with price declining 60% since then.
- Price initially bounced from the horizontal support of $1.61 (new support), but price rejected at the underside of the old horizontal support (now new resistance) and is back to the $1.61 support. This is a key level of support for price.
- Unlike BTC and ETH, WIF hasn't been able to form any bullish divergences, and it's not currently close to oversold territory.
- For WIF to see a more substantial upside again, it needs to clear above $2.20; that'll be the level for bulls to watch.
- WIF is in a local downtrend, so it's possible we get another slight pop higher back into $1.90 to $2.20 in the very short term. However, we're not super confident in this, and we just expect WIF to grind along this $1.50 to $1.90 range for a while.
Cryptonary's take
Overall, WIF doesn't look super strong, but we expect it to still be a good performer over the coming 6-12 months. Therefore, if the price pulls back slightly further, we'll look to sub $1.50 down to $1.30 to potentially accumulate more WIF.POPCAT
- As usual, POP continues to move in a highly volatile manner, with price having bounced from the $0.40 horizontal support.
- Price is now retesting the underside of the previous $0.55 horizontal support, now, it's new resistance. So, this horizontal level of $0.55 is super important for POP to reclaim.
- If it reclaims $0.55, the price will then be eyeing a retest of the prior all-time highs around the $0.70 mark.
- Until price can break above $0.55, it's likely to remain range-bound with the lowest level of support at $0.34.
- With this price pullback from the recent highs of $0.70, the daily RSI has reset from overbought territory and is now back to a neutral level.
Cryptonary's take
We're still phenomenally bullish on POPCAT over the next 6-12 months and believe it has the potential to reach $3 and well north of this level. However, in the short term, price action will likely continue to be range-bound until we see a clean break out above $0.55.We've identified the $0.34 to $0.40 level as a potential accumulation zone for those still looking to enter. For those already positioned, we wouldn't suggest selling and re-buying lower; we'd suggest remaining positioned.
Educational note: Price volatility shouldn't scare traders/participants here. With the potential for big gains, big volatility should also be expected.
TREMP
- From a technical analysis point of view, TREMP is a really clean chart.
- TREMP has been downtrending, but price has moved into an old support zone between $0.27 and $0.40.
- Price has now bounced and reclaimed the next horizontal level of $0.40. Meanwhile, it is squeezing into the downtrend line.
- If price can break out of the downtrend line, the upside target in the short term would be $0.64. This is the next horizontal resistance.
- Previously, price rejected from the horizontal resistance of $0.91, which was prior support before price broke below it.
- One thing that looks less positive is the fact that the volumes are low and have been declining. We'd like to see volumes to increase alongside this from here for a breakout in price.
Cryptonary's take
Of course, with TREMP, price action is somewhat governed by what is going on in the US Presidential race.Currently, it looks as if Biden might not even make it, which is why TREMP performed well until recently. If that dynamic continues, then TREMP can move up again in the upcoming weeks. However, if Biden were to be replaced by a more competent nominee, TREMP may struggle if the odds shift against Trump potentially being the winner of the election.
For those that are not positioned, the above has to be monitored, but we would be looking for entries in TREMP around the $0.27 area (if we're given that level again). The medium-term upside target would be $0.91.
BODEN
- BODEN has had a substantial fall from grace, with price now needing to 5x just to get back to the main horizontal resistance at $0.25.
- Price is currently below $0.07, which has previously been a key level of support and resistance.
- Beyond $0.07, the next horizontal resistance is at $0.18, and this is more than a 3x from current price levels.
- If $0.07 can be reclaimed, then that puts price back into the prior range between $0.07 to $0.18.
- Despite the overall significant weakness, we have seen volumes pick back up over the past week. This is usually positive if you want to see a bullish reversal.
Cryptonary's take
Like TREMP, BODEN will move based on how the markets are pricing who is likely to become the next US President.Currently, with Democrats calling for Biden to step down, it does look somewhat bleak for Biden/BODEN. However, if Biden does stay in the presidential race and comes out and makes a solid commitment that he will, then this could be a macro bottom for BODEN. If BODEN were to retest $0.02, and he is still the Democratic nominee, then that would signal a potential buy.
A breakout above $0.07 could also signal a buy. However, this all depends on whether Biden remains the Democratic nominee in the US elections. Overall, TREMP seems the safer play, as BODEN may sell down heavily if Biden announces that he's going to pull out.
RUNE
- Since early March and the Bitcoin top, RUNE has been in a longer-term downtrend. It has managed to find some levels of support, but unfortunately, these have tended to break down.
- Price is now hovering just above $3.38, which is horizontal support. If the price breaks below $3.38, $2.80 is the next support level.
- Price is beginning to approach a downtrend line; a breakout of this downtrend line could help RUNE gain some upside momentum. However, we would expect this to be short-lived. Given the larger trend at play, $4.78 might be the target for this, but we wouldn't feel confident enough to bet on it.
- RUNE has formed a bullish divergence in oversold territory, which may aid RUNE in a short-term move to the upside.
Cryptonary's take
Despite some positive elements here that signal that RUNE could potentially bounce in the short term (even though we wouldn't expect a strong bounce), we wouldn't bet on this until the macro environment changes to a more risk-on attitude.It would be hard to trade against the trend here, considering RUNE has bled lower for a number of months now. For those who like RUNE and want to be positioned, a possible accumulation zone may be between $2.80 and $3.38. We expect this to be a longer-term hold, and we'll sell the position in 6-12 months' time.
I (Tom) don't own RUNE; I am also looking for opportunities elsewhere rather than RUNE - for transparency's sake.
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