If anything, we see this setup as an opportunity to take advantage of a few plays. Most of these opportunities are just Spot plays.
However, if you're super confident, there are some opportunities to take more leverage plays, but these lie in Bitcoin.
Key questions
- Is the current market fear creating a golden opportunity for crypto traders and investors?
- What crucial levels should you watch for Bitcoin and Ethereum in this pullback?
- Could Solana's unique price action lead to a more volatile move than its peers?
- Is the "trendsetting meme of the cycle" setting up for a potential comeback?
- Which memecoin has shown surprising resilience in the face of market turmoil?
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
- Bitcoin's Funding Rate is flat at 0.01%, indicating an even balance between Longs and Shorts.
- Bitcoin's Open Interest (the amount of leverage) has fallen 10% in the past two days and 20% since the highs in early June.
- We've slowly but surely seen a moderation in the leverage market, which is important to flush out excess and weaker hands that then allows for a continued bull run later.
Technical analysis
- Bitcoin is testing the bottom of its range at the prior lows of $57,000.
- A significant break below $57,000 could send Bitcoin down to the next horizontal support of $52,800.
- Bitcoin is still in its local downtrend, not having been able to confirm a breakout as price rejected into the horizontal resistance of $63,400.
- Bitcoin's price is now forming a new low in oversold territory, which would produce a bullish divergence. This is usually a bullish setup for a trade.
Trade idea: I (Tom) have taken a tactical Long on Bitcoin at these prices, which you can see in the #traders-field channel on Discord. I am running this without a Stop Loss but using little to no leverage. The reason for this is that if I am wrong, I still believe I'll be able to sell BTC later for profit, even if I'm wrong about this local move. The liquidation price is $39,000; however, I don't expect Bitcoin to hit those levels. So, if I'm wrong, the plan is to hold and sell into a bull run in time to come.
Education: A bullish divergence is when price creates a lower low, but the RSI oscillator creates a higher low. This indicates underlying strength and potentially suggests that bears are exhausted.
Cryptonary's take
We're seeing a lot of fear across the timeline while the German Government is selling BTC into a less liquid market with the US on the 4th of July holiday.Alongside this, price is at the bottom of the range, creating a bullish divergence in oversold territory. This is usually a good setup for a Buy/Long. Of course, it's possible that Bitcoin will lose this support, and we will head into the mid- to low $50k.
However, we still expect that big buying would come in at these levels if price reached there. Overall, we remain constructive on the market despite price going lower.
ETH
- ETH's Open Interest has pulled back substantially since the highs in late May. It's down from $16.48b to $13.39b today. It's healthy to see a resetting in the amount of leverage.
- The Funding Rate remains flat at 0.01%, so there is no signal here.
- (Education) A high Funding Rate indicates that there are too many Longs, and they can become vulnerable to a flush-out. A negative Funding Rate indicates there are too many Shorts. Too one-sided, and that side becomes vulnerable to a flush out.
Technical analysis
- It's made some light rally attempts, but ETH has mostly been relatively weak. It fails at horizontal resistances and eventually breaks back below horizontal supports.
- ETH is also in a longer-term downtrend, as is the rest of the market.
- After rejecting at the horizontal resistance of $3,485, ETH moved back down to the horizontal support of $3,280, and price has now lost that level.
- Price has now moved into a larger zone, between $2,875 and $3,100, where we'd expect demand to begin stepping in.
- We'd be quite surprised if ETH lost the $2,875 horizontal support, but we don't expect to see this.
- ETH has finally moved low enough that it is in oversold territory. However, no divergences have been formed so far. We'd need more days of price action for this.
Cryptonary's take
Overall, we don't see this as the time to be bearish on assets. ETH below $3,100 is likely a good entry price if you have a longer-term conviction in ETH.As we've also stated above, we don't see ETH falling below $2,875. Therefore, we'd be buyers of ETH between $2,875 and $3,100, with upside targets of north of $4,500 and potentially substantially higher in the next 6-12 months.
However, we'd refrain from using leverage here, even if we are identifying it as a buying opportunity.
SOL
- SOL's Open Interest (the amount of leverage traders have taken on) spiked in recent days, although it has come back down over the last 24 hours.
- Like BTC and ETH, SOL's Funding Rate is flat at 0.01%.
- Overall, we're seeing a leverage reset across the board here. This is healthy and needed in bull markets to flush out excess and weak hands.
Technical analysis
- SOL rejected from the horizontal resistance of $152 and the underside of the uptrend line.
- SOL has now pulled back to and found support at the horizontal support of $131.
- One thing we do note is that SOL is nowhere close to oversold territory on the RSI like BTC and ETH. This does mean that SOL could potentially have a larger downmove.
- We remain buyers of SOL at attractive price points, which would be price levels under $131 if we were to get them.
- If the $131 horizontal support is lost, we expect $116 to be the next major support. But, there is a big zone of support between $105 and $116, where we expect buyers to step in and bid if price gets there.
Cryptonary's take
SOL is squeezing into the pinpoint between where the downtrend line meets the horizontal level of support at $131. This can create volatility on a breakout or breakdown. Therefore, we remain more calm with SOL as it has the potential to move in a more volatile manner.So, we will be buyers of Spot SOL sub $131, but we're not looking to place any trades on SOL here unless we get a more substantial breakdown and price moves more deeply into oversold territory. Patience on SOL – we still believe we're holding a big winner in the long term.
WIF
- WIF had a very similar move to SOL in that we saw a slight move out of the downtrend, but then price rejected into the horizontal resistance. For WIF, that was at the $2.20 level we had identified.
- We see the $1.50 level as being strong enough that it'll act as support for WIF.
- The RSI is no longer in oversold territory, but a further move down could take it there. If this comes with a new price low, we may get a bullish divergence that could be a good macro bottom for WIF.
- To the upside, WIF will need to reclaim $2.20 first, but then beyond that, the main horizontal resistance is at $3.05 and then $3.40. Currently, they seem a long way off.
Cryptonary's take
WIF is likely to still be the major meme winner of this cycle, so we continue to take a proactive approach to it.This entails buying at the lower valuations - $1.50 and sub $1.50 if we're given it. However, due to the volatility, it's dangerous to trade WIF on leverage here. Therefore, we steer clear of this. Essentially, more patience is needed here. It's currently a low-volume environment mid-summer, and we're expecting interest rate cuts from September onwards, so there are bullish catalysts ahead. We have more months to get through and survive through first. The expectation is that WIF doesn't go much lower than $1.50; it remains range-bound and then moves substantially higher after the summer.
POPCAT
- When POPCAT isn't just on straight surges higher, it is quite respectful to key support and resistance levels.
- Initially, POP held the $0.55 horizontal support. However, it fell below and has now found support at the next horizontal support we marked out at $0.40.
- In this recent move down, the RSI has reset from what were quite overbought levels.
- Below $0.40, there is a strong support zone between $0.32 and $0.34.
- To the upside, the level needing to be reclaimed would be the $0.55 horizontal level.
Cryptonary's take
POPCAT's overall performance has been good, particularly when compared to other memes. If you had said several weeks ago that BTC would retest the range lows, and sentiment would be diabolical along with many altcoins and memes at lows, and then you told me POPCAT would be at $0.45... I'd have taken it.We expect POP to be range-bound for more time, but probably in a larger range between $0.32 and $0.55. Once the market recovers, and we think it can by the end of July if Powell forward guides rate cuts, then POP can be the meme that really continues to see the outperformance.
We're still holding and not looking to sell at these prices.
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