Jan 27 Mid Day Crypto Analysis

Technical Analysis is a method used to analyze financial markets by studying the price movement and volume levels of an asset. The idea is to forecast the future price of an asset, based on the previous trading activity or prices of an asset.

BTC/USD

Bitcoin is moving sideways, continuing to consolidate after reaching a new all time high of 42k. Trading in a range of 28732 – 34888, on the day Bitcoin is down 5.28%. Volume is healthy and indicates more trading activity when compared with pre-bull run volumes. The daily chart below shows the range BTC is trading in:

Bitcoin trading in the range marked by the solid black lines on the chart

Bitcoin looks to be attempting to form a resistance zone in this range. The daily candle approached the previous low of 28732 before being rejected, as buyers drove the price back up over 30k. This can be seen on the 1hr chart:

In the days ahead, we will be watching the triangle developing on the daily chart. Triangles indicate that the price is being squeezed, and will eventually breakout of the triangle. Currently, the MACD and the RSI indicators indicate further action to the downside. However, we saw the bulls quickly defend the price as it approached the previous low of 28732, which also is the bottom of the triangle, quickly returning the price to above 30k.

ETH/USD

Ethereum posted an all time high on Monday of $1477, topping the previous all time high which was reached just days prior of $1440. After the price broke the all time high, an immediate consolidation happened back below the previous all time high. 

Ethereum appears to be trading in an upwards channel, signaling continuing moves to the upside, however divergence is appearing in the RSI and the MACD indicators, signaling the uptrend is weakening. Divergence is when there is a difference between indicators when they should be following the same direction.

In the days ahead, we will be monitoring the uptrend, we want to see higher highs, followed by higher lows. Until that pattern breaks, the uptrend is still intact. Based on the divergence appearing in the daily RSI and MACD indicators, the first sign of the uptrend breaking would be for Ethereum to post a lower high instead of a higher high, or a lower low, instead of a higher low

UNI/USD

While most of the crypto market is in the red today, Uniswap is in the green posting a 6% gain as of press time. Uniswap is in an uptrend, and is currently posting a higher high, and pressing against the upper trendline.

In the days ahead, we will be watching how the price reacts to its current position. The MACD and the RSI are both very high, signaling Uniswap is overbought and due to pullback. We want to see Uniswap pullback and post a higher low, then continue the uptrend and posting a higher high.

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