Leverage flush clears the path for more upside: Find the buy zones

But for now, if you haven’t already, you should use these prices to invest more capital in core plays.

TLDR

• The crypto market is experiencing a mid-cycle pause and deleveraging event, but we still view it as positive in the long term.
• BTC holds a bullish flag pattern, with support around $60k-$62k, which is seen as a potential buy zone.
• ETH is testing support around $2,900-$3,090; we consider this an attractive area to add exposure.
• SOL has seen a 38% pullback, presenting a good long-term buying opportunity at current levels.
• After recent pullbacks, other altcoins, such as RUNE, LINK, and PYTH, were also identified as having attractive buy zones.

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. "One Glance" by Cryptonary sometimes uses the RR trading tool to help you quickly understand our analysis. These are not signals, and they are not financial advice.

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BTC

BTC has a much healthier leverage setup here, with Open Interest decreasing from $36b at the most recent highs to $29.25b now. A 20% decrease is relatively meaningful in a bull market and should be considered a healthy retracement.

The Funding Rate has also returned to more "normal" levels, which indicates there isn't a significant bias in terms of direction/positioning between Longs and Shorts.

Technical analysis

• The move in price above the bull flag, or at the time, the bullish pennant, was, in fact, a deviation. Price has now moved lower and back into the flag.
• Price is currently finding support at the horizontal level of $63k, along with the 50% line of the bull flag.
• We have seen several wicks into the $60k-$62k area that have been relatively swiftly bought up, so demand is stepping in.
• If price enters the Yellow Buy Box between $59,200 and $60,700, this would be the area we'd consider buying.
• The RSI on the larger timeframes (except the Weekly) have been substantially reset.

Cryptonary's take 

Overall, BTC still looks relatively positive here, and we’d classify this price decline as a mid-cycle pause and deleveraging event. 

Bitcoin is still holding the bull flag structure that may break out higher in 3-6 weeks. We drew the arrows for the BTC chart, and so far, the price has followed the arrows. 

If a bull flag breakout occurs in the next 1-2 months, we still won’t classify this as bearish; in fact, it would be the opposite. For now, we remain patient and calm, sitting in Spot BTC positions with the view to potentially adding to our bags if BTC drops slightly below $60k.

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ETH

ETH's Open Interest has dropped from the local highs of $13.0b to $9.9b, an approximate 25% decrease. It’s good to see excess leverage, which has built up over the past few months, flushed out.

ETH's Funding Rate is at 0.005% which is low and shows that there is a clear mix of positioning between Longs and Shorts. Again, a much healthier setup than what we have seen recently.

Technical analysis

• As we called it perfectly, the bear flag formation broke down, and ETH tested the Yellow Buy Box. Bidding is now between $2,900 and $3,090 at the Yellow Buy Box.
• It's possible ETH falls below this current level, but we see this area as an area of support and we therefore expect the high $2,000s to hold up (north of $2,800, let's say).
• The RSI has reset on all major timeframes, which is positive for the price’s potential to go higher.
• It's possible that price is range-bound for another few weeks between $2,900 and $3,400.
• $2,600 is the major horizontal support on ETH, and we would be surprised to see that level be retested, let alone for price to break below it.

Cryptonary's take 

Around the $2,900 mark would be where I'd (Tom) place Limit Buy Orders if I were interested in more ETH exposure. However, overall, our focus is on adding exposure to SOL and SOL ecosystem plays.

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SOL

Just two weeks ago, SOL's Open Interest was at $2.86b; now, it’s at $1.49b. This is nearly a 50% decline in Open Interest. Whatever excess leverage had been built up has now absolutely been flushed out. Overall, this is a very positive sign as it’s substantially reset the leverage environment, which should provide us with a cleaner base for price increases.

The Funding Rate is at 0.002%, which shows that there is now a very close to even positioning between Longs and Shorts. This is a healthy setup.

Technical analysis

• SOL has fallen below its larger Yellow Buy Box between $141 and $154, currently down 38% from its highs.
• SOL is now battling at a key horizontal support level at $131. Below this, there is huge support between $102 and $110, although we doubt price gets as low as that area.
• On the Daily, SOL is currently printing a bull div just above oversold territory while also holding on to horizontal support. This would be a good Long setup here; many of the technicals align.
• The RSI on the major timeframes is now well below overbought territory, which is a really clean, healthy resetting.
• To the upside, $151 would be the horizontal level for price to get back above.

Cryptonary's take 

SOL has now seen a 38% pullback from current prices, and the technicals suggest a relatively good level of price support. If we were under-exposed to SOL or just wanted more, the current price is an attractive price long-term, in our opinion. We would be surprised in the long term if the current price did not reflect an attractive buying opportunity.

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RUNE

• The Yellow Buy Box between $7.05 and $7.50 worked for the first move, but price could not hold above that area.
• Price has then broken below the $6.50 horizontal support and has moved directly to the next horizontal support at $4.78.
• It's possible that price moves lower and fills the local wick. However, price is forming a bull div just above oversold territory, which is a bullish setup to potentially bounce.
• The RSI on larger timeframes has reset substantially also, providing fewer headwinds from this perspective for price to go higher in the coming weeks/months.

Cryptonary's take 

If you're a fan of RUNE, the current price would be the area to consider adding to your positions. If you liked RUNE at $11, you should love it here at $5. If $4.78 breaks down, then there may be a tad more short-term downside, although we think the downside may be more limited here (like we think for the rest of the market), so we see current prices as good long-term buying opportunities.

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LINK

• This is a relatively similar setup to RUNE in that the price broke below a key horizontal level of $17.74 and has plummeted to the $13s area.
• Price is now battling at another key horizontal level of $13.30.
• However, price is forming a bullish divergence in oversold territory. This is a prime setup for a bounce in the coming week.
• Major timeframe RSIs have reset substantially, providing a healthier setup.

Cryptonary's take

From a zoomed-out, long-term perspective, the current price of LINK is attractive. If you're under-exposed, the current price is likely at a good long-term level for buying LINK.

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PYTH

• PYTH has had a really significant breakdown for price, although price did bounce from a really key horizontal support level at $0.52.
• Price is putting in a bull div just above oversold conditions. This could provide the right recipe for a bounce.
• The RSI has been reset on all the major timeframes.

Cryptonary's take

If you have 0 or little exposure to PYTH, we consider the current prices to be a great long-term buying opportunity. A recovery may take some more weeks, but we do expect a recovery and higher prices in Q3.

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SHDW

• Overall, the price action was phenomenally poor, having entered well back into the range between $1.05 and $1.80. Now, it is actually at the bottom end of that range.
• The RSI has pulled back but is not too close to oversold territory yet – this is disappointing.
• We hope and expect the support zone of $0.92 to $1.05 to hold and provide some support for the price to begin recovering slightly in the coming weeks/months.

Cryptonary's take 

Again, this is just a really disappointing price action for SHDW. It is well back to levels seen at the end of 2023 and seems to have made no gains whatsoever, even from a zoomed-out view. 

If SHDW recovers in the coming weeks, higher prices may be a good excuse to trim down positions in SHDW (just to reduce the size of the position) and then look to put that capital to work in other opportunities. We considered dumping SHDW weeks ago due to poor price action but held on. In hindsight, this was, of course, a mistake.