by Jamie Holmes
BTCManager's Weekly Cryptocurrency Outlook highlights the price action and technical indicators on a long-term basis to identify the best opportunities in the largest cryptocurrencies, such as bitcoin, ether, and others.
Bitcoin goes for its eighth week of consecutive gains, nearing the psychological $3000 level on June 6. As we have nine near consecutive higher highs since March 20, we expect the bullish run for BTC-USD to peak sometime between June 12 and July 24. A higher high next week will give a strong indication that bulls have reached their limit and a higher likelihood of a reversal into a downward trend. The weekly price action is shown below.
Although we can use the number of record highs to determine when bitcoin will peak, we use the Fibonacci sequence to find out a possible target. The daily price action shown below illustrates that on June 6, BTC-USD broke above the previous all-time high at $2760.10. Accordingly, this opens up the Fibonacci extension level at $3476.14. Also, the psychological $3000 level stands in the way as well.
Also, notice from the chart above that the conversion line (blue) has a sharp gradient and is moving higher, suggesting the direction of the market will continue to be up. Moreover, the Market Facilitation Index is green for June 6, suggesting traders should follow the trend and find optimal entry points into long positions.
The Ichimoku cloud shows that the $2000 to $2200 area will provide an important support zone toward the end of June, which is where BTC-USD may head once bulls have been exhausted and we have seen ten or 11 near consecutive higher highs.
The monthly price action is bullish, as May’s close was in the upper third of the range, closing above $2260. Therefore, we expect bulls to dominate once again in June. However, a key Fibonacci resistance is anticipated to dampen bullish sentiment around $3041.14. Also, the move higher in BTC-USD is supported by higher volumes, as May saw the highest volumes on the Bitstamp exchange since November 2015, foretelling of continued upward momentum. For instance, after a large influx of volume in November 2015, BTC-USD went on to establish a local high at $778.85 in June 2016.
Ether has also broken to fresh highs, trading at $267.00 on the Kraken exchange at the time of writing. The next target is the Fibonacci extension level at $284.41, shown below. Further resistance is found at $409.73. Last week, we highlighted a bullish signal for ETH-USD, with a completion of the bullish saucer in the Awesome Oscillator, which gave a buy signal around $230. Another bullish saucer signal looks to be formed on June 6, with a potential trigger to enter into another long position if June 6’s high is broken in the following days. For instance, the daily chart below shows that bullish saucer patter. Once June 6’s high is broken, we should enter long positions immediately, targeting $284.41 and $409.73 over the long term.
Therefore, once June 6’s candlestick closes, we should set a limit buy order at the high of this candle immediately. Notice the previous bullish saucer was triggered the next day and only took a few days to move into a significant profit.
The monthly chart for XEM-BTC shown below illustrates the first bullish signal possible, a crossover of the conversion line (blue) and base line (red), giving an indication of bullish momentum over the long term. Furthermore, we now have two monthly closes higher than the fractal resistance at 0.00002798, confirming long-term bullish momentum.
However, there are also some bearish indications. We may see XEM-BTC test the base line, which provides support around 0.00007000. A monthly close below this level will necessitate a bearish outlook. Also, we see that there is a long upper wick for May’s price action, suggesting that bulls are no longer in control, which gives a high likelihood that the base line will be tested and may even be broken.
The weekly price action is displayed below and shows that the market is at a critical juncture. The base line aligns with the 50 percent Fibonacci retracement level, highlighting strong support around 0.00007133. We look to buy XEM-BTC at the 50 percent and 38.2 percent retracement levels at 0.00007133 and 0.00005516 respectively. However, a weekly close below the base line will point to a bearish outlook and see XEM-BTC drift toward long-term equilibrium as shown by the Ichimoku cloud.
After testing the base line and triggering our suggested buy orders near 0.0032, ETC-BTC went onto establish fresh highs, just missing a test of the all-time high. The weekly chart is displayed below, where the market is nearing support provided by the conversion line and the 50 percent level of the bearish Marubozu candlestick.
We await the weekly close before deciding on positions, as a weekly close below the conversion or base line will point to bearish momentum. On the other hand, we could set limit buy orders around 0.0057 to 0.0052, as the conversion line and base line may offer strong support.
LTC-USD saw dominance among bulls last week as buyers moved the price from $22.90 to above $27 by May June 4. However, the weekly close was below the peak of the lagging line (purple), that is below $28.67, so we have yet to obtain a signal for a bullish breakout. Therefore, we look to buy LTC-USD if this week’s close is higher than $28.67, which will open up the all-time high at $36.30. The conversion line (blue) is moving higher suggesting the market will follow. LTC-USD may reach as high as $56.47 if the fractal resistance at $36.30 is broken.
However, volume is falling suggesting that traders are losing interest in litecoin. Also, the Awesome Oscillator looks like it may switch color to red, which will give an early sign of faltering bullish momentum.
The daily price action for monero shows that the cryptocurrency is heading for the Fibonacci extension at $63.64, after breaking above the $50 handle for the second time in its short history. The Fibonacci levels are also shown on the chart below, with further resistance found at $72.52. However, a dip back below the Fibonacci level at $49.26 will point to a bearish outlook.
However, momentum is also considered bullish, as on June 6, we get a strong bullish signal with a crossover of the conversion line and base line. Now that the conversion line (blue) is above the base line, we should see an intensification of upward momentum. Moreover, notice the large influx of volume into the Kraken exchange on June 6, which foretells of further appreciation for XMR-USD.
Finally, on June 6, we see that the bullish saucer signal has been triggered, suggesting an entry into a long position around $48.73. A daily close above the resistance at $55.42 will give further bullish confirmation.
Following the announcements from JP Morgan and Alphabay regarding Zcash integration, the price of the cryptocurrency has risen significantly and further gains look to be established. If ZEC-USD remains above $250 we should see a lot of potential upside. For instance, the daily chart below shows that ZEC-USD peaked at $300.00 on the aforementioned announcements and currently rests above the Fibonacci level at $249.49 which signals that ZEC-SD will tend toward the Fibonacci resistance at $300.00. Finally, the market remains above the resistance indicated by the lagging line (purple) at $245.73, and if the market maintains above this level, this means moves to the upside are relatively unrestricted, as the lagging line indicates no further resistances, opening up the Fibonacci level at $300.00.
Market participants should anticipate a break of $300 which would see the market be attracted toward the Fibonacci extension level at $432.25. The conversion line offers support around $228, which could be an ideal entry into a long position, however, a daily close below the conversion line will invalidate the bullish outlook.