Market Commentary von Patrick Heusser, Crypto Finance AG
In the end, the market grew tired after failing repeatedly at the 10k mark. Once again, the Ichimoku cloud signalled more weakness when the price moved into the cloud. After breaking through the lower band, the price quickly dropped to 8.6k.
There is a large liquidity pool around 8.8k, which is working like a magnet for the consolidation. I still see the 8.3k level as the support line that needs to hold on a 4h closing level (for the swift dips that we saw, e.g. around May 10/11).
If we fail to hold the support, I expect to see a move down towards 7-7.5k, which is where the next large liquidity pool is at.
In terms of the big picture: the price is at the upper end of a large potential triangle, which everyone is talking about. Following a technical chart analysis textbook, it would make sense to correct towards the 7.5k area, which is roughly in the middle of the triangle, and then start a last fierce attempt to break higher.
The $190 support held once again. But we did not reach new highs. The way the market feels right now, I believe we are ready for a big move. The problem is, however, that there is no indication out there as to which way things will go...
If I zoom out to the daily chart, I can see that we reached lower highs and lower lows over the past 12 months. This is a bearish trend. The problem is that the swings between those highs and lows have been massive in percentage and also very erratic. It does not help me much to try to determine a sentiment from this to predict the next move.
Therefore, I am waiting for the move to happen, and will then try to act swiftly if there is a worthy position/risk to take, once the market has settled.
SHIT Index (daily)
The music seems to be playing for the lower cap altcoins. The FTX SHIT index is near its all-time high (versus BTC but also versus USD). It is hard for me to see where and why the euphoria is coming from. A more in-depth analysis will follow at the end of the month in our monthly Sector Analysis Report.
Chart versus BTC
Chart versus USD
So far, the trade has worked well. The price is still fighting to push through the upper band of the Ichimoku cloud.
The 4h chart also looks promising in terms of the bullish trend. We made higher highs and higher lows after we bounced off the trendline. The target is still to reach the last significant top at around 0.000520.
There is not much to say. The price is pushing against the upper band of the Ichimoku cloud. We are right below the base line (blue line). I think it would be a bullish sign if we were to break the base line to the upside.
And now just for fun I would like to post the charts of the HASH-RATE futures, which are tradeable on FTX. The name is slightly misleading since you are not trading the HASH-RATE, but rather the difficulty adjustment.
HASH-RATE Q3 2020
HASH-RATE Q4 2020
HASH-RATE Q1 2021
One simple observation: the HASH-RATE curve is in contango (longer dated futures are trading higher). The first contract, HASH-RATE Q3 2020, is the one that will be very close to "spot", which is easy to observe on this page.
At the time of writing this market commentary, the expected difficulty change (more on this in a week's time) is at around -13%. In Difficulty HASH-RATE future terms, the expected "spot" price is expected to be around 13. But do not forget that the HASH-RATE future price is not a snapshot fixing. It is the average of all the difficulty adjustments over the course of the third quarter of 2020.
If you would like more insights on this, reach out to us. We are more than happy to have a chat with you about it.