Bitcoin Trades Up to $61,000, Down to $55,000

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•  Bitcoin (BTC, Tech/Adoption Grade “A-”) blasted to new all-time highs over the weekend but suffered a 10% correction this morning.

•  Ethereum (ETH, Tech/Adoption Grade “A-”), failing to make its own new high, may have formed a “double-top” over the weekend.

•  LiteCoin (LTC, Tech/Adoption Grade “B-”) is trading down 13% from weekend highs.

Satoshi Nakamoto’s prized creation had an excellent start to the weekend, setting a new all-time high just north of $61,000 on Friday night and rising into Saturday.

As Sunday progressed, though, Bitcoin came back down to Earth, retracing a full 10% from the highs to a low of $55,000 before settling in near $57,000 Monday morning. This is a disappointing development, as most observers expected Bitcoin to break previous highs and to keep climbing.

That bigger, longer run doesn’t seem to be happening — at least for now.

Today, we’re watching the support level of $55,000 as well as the resistance level of $60,000. We’d expect one of those levels to give way early this week.

Here’s BTC in U.S. dollar terms via Coinbase:

Ethereum also broke higher on Friday, though, unlike Bitcoin, it was unable to set a new all-time high.

Ethereum’s price chart does not look as good as Bitcoin’s. In fact, ETH looks like it may have formed a double-top over the weekend. It’s critically important that ETH hold above its 21-day moving average here and make another run at a new high at some point in the near future, else we may have to readjust our bullish outlook for the No. 2 crypto.

Here’s ETH in U.S. dollar terms via Coinbase:

Litecoin topped out around $230 over the weekend but has now receded about 13% from those levels.

LTC wasn’t able to top its annual high around $240, reached on Feb. 20. And it still hasn’t come close to topping its all-time high above $300, reached in 2017. Indeed, it’s underperformed its counterparts so far during the current bull market.

LTC appears to have found some support at $200 and will look to hold there before making another run. A break below $200 will test the 21-day moving average; anything below that would indicate the beginning of a bearish cycle.

Here’s LTC in U.S. dollar terms via Coinbase:


Notable News, Notes and Tweets

•  Bitcoin ATMs are popping up all over the United States.

•  Dan Held of Kraken, highlighting another indicator of Bitcoin’s trajectory, notes that BTC’s yearly lows have trended up every year but one since 2012.

•  Anthony Pompliano says Bitcoin was “the single best safe haven asset for investors” amid the recent crisis.

What’s Next

The crypto market has experienced a lot of volatility over the last month. From the highs set in mid-February to the dip at the end of the month, recent price swings have been harsh.

It’s important to keep in mind that cryptocurrencies are known for their high implied volatility during bull markets, a key difference separating them from assets on traditional markets. 

This can be a very hard concept to grasp for investors new to the space, and this is why crypto investors have coined two important terms: “HODL” and “Buy the Dip.”

First, no that’s not a typo; “HODL” is a signal to everyone to hold on to your crypto long term, no matter what, throughout all types of market swings. It was a social-media mistype, then it was a meme, now it’s a malaprop-battle cry.

Now, as for “Buy the Dip,” it’s the same mantra applicable in hot equity markets to names of conviction that have eyes on the future. When the market suffers through sharp retracements — and crypto markets are known for such moves — it’s time to increase positions. These retracements are opportunities.

Right now, we appear to be in limbo. The market hasn’t been able to make up its mind whether we’ll see new highs, or whether we’re in the beginning stages of a longer correction. Time will tell. For now, we’ll keep an eye out for the levels we discussed here today to help make an educated forecast on short-term direction. 

Stay tuned for updates on those levels …

Best,

Alex

About the Crypto Analyst

Alex has been actively researching and investing in cryptocurrencies since 2017. He contributes research and reports to several Weiss crypto publications, with a primary focus on helping to create crypto trading strategies.

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