Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice
Bitcoin faced some resistance at the $30.8k level as it formed a hidden bearish divergence with a momentum indicator on a higher timeframe, and the price of BTC slipped beneath the $30k mark once again. This caused altcoins to begin to face selling pressure as well. ApeCoin saw significant demand in recent days from the $5.5 lows, and the bulls were fighting for control of the $8 area at press time.
APE- 1 Hour Chart
Based on APE’s move from $17.65 to $11.77 earlier this month, a set of Fibonacci retracement and extension levels (yellow) was plotted. It showed that the 27.2% and 61.8% extension levels have been quite significant in the past few days.
In the $8 area, a bearish order block was spotted. This demarcated the cyan box to be an area where sellers had seized control and subsequently were able to exert enough selling pressure to cause a sharp move downwards.
However, in the past couple of days, the price formed higher lows after a drop to $5.4, and at press time the price was trading above the $8.13 level and this demand zone. A session close beneath this zone could see APE fall to the $7 mark, or even as far south as the $5.8 level.
On the hourly chart, the RSI slipped beneath the zero line to give an early sign that bears were starting to assert themselves. The Awesome Oscillator also fell below the zero line, to show that bearish momentum was starting to take hold. However, it was not significantly bearish yet at press time.
The OBV has been climbing quite strongly in the past two days, and the demand has been significant on APE’s rise from the $5.5 lows. The influx of buying pressure meant that ApeCoin could push higher after a pullback.
To the south, $7 and $5.4 levels could offer support to APE on a session close beneath the $8.1 level. Higher on the charts, the $9.5 would likely be a place where sellers remained strong. The $10.58 level would also offer resistance to the price on the way up, as it represents the range lows from March and early April.
Bitcoin [BTC]: Here are a few signals that point to a strong possibility of a recovery
Bitcoin price seems to have found its stable footing at $29,100 after a recent flash crash below it. This quick recovery and retest will be a testament to the bulls’ power and determine the next course of action for BTC.
Bitcoin price to provide temporary gains
Bitcoin price created a bearish continuation pattern known as a bear flag between November 2021 and April 2022. After a brief consolidation in late April, BTC triggered a breakout from the setup, triggering a massive sell-off.
The pattern contains a massive downswing known as “flagpole” followed by a consolidation phase known as “flag.” A breakout from this coiling-up often results in the price continuing its descent, which is why the setup is referred to as the continuation pattern.
This technical formation forecasts a 46% downswing, determined by adding the flagpole’s height to the breakout point. On April 22, BTC breached the flag’s lower trend line at $40,032, forecasting a target of $21,584.
So far, the post-FOMC volatility combined with the LUNA-UST debacle has stirred the market and caused it to crash violently. As a result, BTC dropped to $25,333, taking altcoins with it. However, the recovery of Bitcoin price seems to be going well as it is back above the $29,100 support level.
If bulls can manage a successful retest, it will reveal that a further uptrend is likely. In such a case, investors can expect a move to $35,100. This uptrend would constitute a total of 17% gain and is likely where the upside is capped.
Further removing the uncertainty for the retail investors’ minds is the recent tweet from the Luna Foundation Guard (LFG). The announcement stated that LFG has sold 80,081BTC from its reserve that held 80,394 BTC.
1/ As of Saturday, May 7, 2022, the Luna Foundation Guard held a reserve consisting of the following assets:
· 80,394 $BTC
· 39,914 $BNB
· 26,281,671 $USDT
· 23,555,590 $USDC
· 1,973,554 $AVAX
· 697,344 $UST
· 1,691,261 $LUNA
— LFG | Luna Foundation Guard (@LFG_org) May 16, 2022
This news suggests that a further sell-off seems unlikely, which could push buyers to start bidding.
The tweet further stated,
“The Foundation is looking to use its remaining assets to compensate remaining users of $UST, smallest holders first. We are still debating through various distribution methods, updates to follow soon.”
Supporting this outlook for Bitcoin price is the supply on the exchanges chart. This index tracks the number of BTC held on exchanges, which could be interpreted as a potential sell-side pressure. In case of a sell-off, investors would not think twice and could panic sell, causing a cascade of sell orders that could steepen the downswing.
However, for Bitcoin, the number of tokens held on centralized entities has fallen by 50,000 BTC, denoting an effective decline in the potential sell pressure. This development falls in line with the bullish outlook from a technical perspective
Therefore, investors can expect BTC to rally in the near future.
Cyptopunks: Despite 560% spike in sales volumes, why’s there fear in the air
In March, Yuga Labs, the creators of the Bored Ape Yacht Club announced the acquisition of CryptoPunks. CryptoPunks have captured plenty of attention- thanks to endorsements from celebrities and athletes. However, despite the fame, the project has witnessed significant backlash from the community.
Analyzing this ‘punk’
At press time, the NFT marketplace yielded an overall sales volume of around $20 billion as per CoinMarketCap. Although, given the ongoing bearish sentiment in the crypto market, many projects have suffered a fall. However, CryptoPunks recorded a new milestone that placed the project just below Axie Infinity when it comes to the all-time ranking of NFTs by volume.
The 24-hour trading volume of CryptoPunks increased by 371% to $3.98 million, ranking second in the 24-hour trading volume of the NFT market. In fact, at press time, the platform witnessed a 560% rise as the trading volume crossed the $5.1 million mark.
Looking at insights on OpenSea, CryptoPunks, indeed enjoyed a much needed uptick in the sales domain as seen in the graph below over 90 days.
Likewise, given the demand, holders’ count increased by more 3% within the same period. Likewise, given the need, the current floor price rose to 53.8 ETH, with a market value of $1.67 billion.
Since January 2022, the NFT project grew substantially in total transaction counts, including a surge in unique monthly users, reaching 501 transactions and an approximate sales volume of $6.1 million.
All smiles here?
Well, this certainly isn’t the case here for this project. The investor who bought CryptoPunk #273 for more than $1 million less than seven months ago sold the NFT for $139,530 — at a massive almost 80% loss. Out of the last 10 CryptoPunks that have been sold, eight were sold at a loss.
Such headwinds did create a lot of speculations and FUDs for this project.
Chainlink: Key levels where investors can considering creating a position
Since striking its ATH a year ago, Chainlink (LINK) bears have made a visible effort to find fresher lows. The lower peaks coupled with even lower troughs helped the sellers pierce through the 15-month trendline support (now resistance).
An extended selling vigor can now drag LINK to retest its $6.5-support before the bears give a leeway to the buyers. At press time, LINK traded at $7.37.
LINK Daily Chart
Despite upholding the $12-mark for over 16 months, the bulls failed to defend this level after the bears made the most of the fear sentiment and provoked liquidations. Without a surprise, it became viable for them to pull off a nearly 60% drop from the $12.6-level. In this bloodbath, LINK took a plunge toward its 22-month low on 12 May.
The current price was slightly overstretched from the alt’s 20 SMA (red) and 50 SMA (cyan). Also, the gap between the 20 EMA and 50 EMA has significantly risen to display a one-sided bear dominance. Historically, the buyers have bridged the overextended gap between the 20/50 EMA by propelling short-term rallies.
The Relative Strength Index failed to show a strong revival after undertaking a bearish divergence with price. An undesired fall below the 30-mark could lead to a much-needed recovery from the oversold region.
After peaking at its record high, the -DI line showed some slowing signs. Keeping in mind its past tendencies, it could head south and thus lead to an ease in the selling pressure.
Taking cognizance of the one-sided bearish dominance revealed by the indicators, a continued fall could see testing grounds at the $6.5-level. With the overstretched readings on its Moving averages, RSI and DMI, the buyers would be keen to show up in the $6.5-$7 zone. In which case, they would mount on buying volumes to snap the $8-level in the coming sessions.
Even so, an overall market sentiment analysis becomes vital to complement the technical factors to make a profitable move.
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