Monthly Analysis: Retests or Breakdowns?

When in doubt, zoom out.

Often in financial markets, it becomes difficult to assess what may happen next with decent odds as we start focusing major time on minor timeframes. A good analogy for it is trying to read a paper that is placed right on your nose, you can't read because it's too close; you miss out on the big picture. Only when you zoom out can you see the big and full picture. The same aspect is applicable to prices. Hence, in the following analysis we'll be looking at the monthly timeframes from a technical perspective on multiple assets, starting with bitcoin.

BTC

The other aspect to look at is the fact that selling pressure has dampened from May to June as the latter's candle was an indecisive one with a reasonably large downside wick, which tells us buyers and sellers are in agreement in regards to BTC's price at this point in time. It all boils down as to whether sidelined capital is large enough to move the tide around or not. As a side note, the sidelined capital is institutional.

This is not to state or insinuate that the bottom is certainly in and a test of $20,000 is completely impossible (no such thing as certainties in financial markets). However what the monthly timeframe does communicate is a continuous and relentless registration of higher highs and higher lows on the Bitcoin chart which is bullish on the long-term. Shifting tides and building up momentum takes time though.

ETH

From a technical perspective, ETH broke out from the 2017, set a new high and is setting a higher low as well. This denominates a bullish market structure. Of course $4,000 will be problematic as there was a large rejection at that level, nonetheless the trend tells us it will most probably be overtaken.

Ether is newer to this world than Bitcoin and hence it has less data. However this is the second full on bull-market that ETH enters as it wasn't around in 2013. When BTC rallied in 2017, it driven by hype and retail and more importantly the product wasn't fully utilised and has more flaws than today. Now, an entire financial system is built on ETH and hence for us personally, this isn't something we consider selling nor fading.

DOT

When we zoom out, suddenly we start seeing how young some of these assets really are and that we are in the first inning of their birth. From a monthly perspective, DOT doesn't look too bullish and a test of $7.50 cannot be ruled out. On the daily timeframe, $15 is protecting it from such downside but if the latter breaks then the former scenario would probably occur. Ultimately, however, the decision is made by BTC who still rules this market - for now.

SNX

Looking at SNX from the 1M chart we can see that this latest sell-off is a retest of a previous high and hence not worrisome based on this. Of course, a lot can happen intra-month but it does seem probable that July candle closure also takes place above $7.37.

RUNE

RUNE has reached a previous level of S/R (=Support/Resistance) near $4.25. This level holding would be a line in the sand to protect from further downside leading to ~$1.00. Another aspect is that $5 is a psychological key level where market participants base decisions. Despite the severity of the drop we cannot state that RUNE has turned into a bearish market structure on the long-term by any means.

SOL

Out of all assets covered in this analysis, SOL is the only one to have closed a green monthly candle and that shows the level of demand and interest lying in that token. SOL has a monthly resistance level at $43 which also coincides with the neckline of the double bottom formation on the daily timeframe that targets $64. A break of the latter will help price advance into brand new price discovery - $43 is an important price for SOL.

SRM

Despite SRM looking awfully bad on the daily timeframe, on the monthly it has not breached the previous high of $3.20.

FTT

Just like the daily timeframe, FTT has support at ~$25 and resistance at $35. One of them must be breached for directional clarity.

 

Disclaimer: NOT FINANCIAL NOR INVESTMENT ADVICE. Only you are responsible for any capital-related decisions you make and only you are accountable for the results.