Bitcoin and Ethereum are preparing for a correction in a secular uptrend
Bitcoin and Ethereum experienced some really good weeks. Both tokens recovered very quickly from a deep pullback that suddenly reversed in the depths of the banking crisis. But in this current market environment, there are no sustained trends. All trends tend to last between 1 and 3 weeks. Crypto is no exception, any crypto bull run in 2023 lasted a maximum of 3 weeks. Example: XRP went up 3 weeks even though XRP has the most beautiful long-term chart setup in 2023. What’s next for BTC, ETH and the rest of the crypto market?
Speaking of a sudden move in crypto, when the rally in crypto and leading indices like the S&P 500 started, there was so much pessimism that we were lone voices writing the following articles:
Big opportunity: Tech stocks ARE the new leaders
The market’s downside target reached – now what?
How to know if there is systemic risk in this market?
The consensus was that a major downtrend was beginning, we said the exact opposite: no downtrend until and unless our systemic market crash indicator breaks down.
Let’s first look at the BTC and ETH charts, starting with the daily and then looking at the weekly (long-term, big picture), to answer the question “what’s next for crypto”.
BTC recorded a beautiful reversal. In our crypto investment research service, we said on Tuesday, April 18 that BTC hit major resistance, the pullback started a day later. That’s because 30.3k marked the 50% retracement level of the big decline between November 2021 and November 2022.
The lower levels that should be tested in the next 4 to 8 weeks are 25k and 22k. Below 22k there is good support, we do not see a new downtrend that will break 20k to the downside.
The long-term BTC chart is quite impressive. On the one hand because it shows how big the decline has been since November 2021, on the other hand because it shows how much upside potential there is. In other words, the last run from 20,000 to 30,000 is just a small run in the grand scheme of things.
At the same time, everyone can see how fragile and young this current reversal still is. There is more work (and time) needed for it to become a truly strong reversal structure that will allow for a large and sustained run higher.
Similarly, ETH, the other leading indicator in the crypto market, has a comparable profile to BTC.
Dagbladet has resistance at exactly the same level as where BTC had its resistance: 2090 USD. That’s where ETH started tracking.
The long-term ETH chart is honestly looking more aggressive. We think there is a lot of upside potential here, but the reversal is also young and fragile.
Conclusion: while the last run was impressive, it was primarily due to the fact that it happened at a very unexpected time. The run in BTC was almost 50%, that in ETH around 35%.
The upside potential in both is great, but a pause is necessary because the charts need more time for solid base building. Remember that the longer the base pattern is, the more powerful the next move will be.
In our crypto research service, we will track the relative strength of our 30 token watchlist. We also expect to hit at least one unicorn (a multi-bagger) during the summer, which, according to our chart patterns, will be a bullish period for crypto. Between now and then, it’s important to be patient and watch closely for tokens that show relative strength!
