Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice
Capital preservation is of utmost importance to traders and investors alike. In times of such aggressive volatility, fence-straddling becomes a valuable skill. One would see multiple altcoins lose double-digit percentage points, and look to short the asset. Conversely, trying to time the bottom is also a hobby of scores of market participants. Especially in the case of Bitcoin and other crypto assets, catching knives could quickly turn painful.
100k BTC was sold in the span of five days as the LFG selling pressure fueled fear in the market. At press time, the downward momentum has not yet halted.
BTC- 1 Hour Chart
Bitcoin had strong support levels at $32k and $29.4k but both of these levels have been breached and retested as resistance. Going forward, the $27.2k and $25.4k levels could act as support for BTC.
The trend of BTC is overwhelmingly downward on the charts, and in the next few weeks, it could drop to $24k or lower. A sign of a shift in momentum would be Bitcoin climbing back above $30k. However, that alone will not be enough to signal a trend reversal.
In the near term, more downside is to be expected. A move to the $29.4k-$30.2k area could offer opportunities to short or sell. Bear in mind that these would be scalp shorts if entered, as the time to short Bitcoin might not be after a 30% drop.
There was no bullish divergence visible on the hourly chart, as both the RSI and the AO continued to drop, to highlight the bearish trend strengthening. Both the RSI and the AO made lower lows alongside the price.
The OBV also made lower lows, to reflect the fact that sellers have been extremely dominant in the past few days.
A short-term play could be to attempt to short a revisit to the $29.2k area, with stop-losses just above the $30k mark. More risk-averse market participants ought to opt to sit on the sidelines and save their cash for the future.
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.
This is how Polygon [MATIC] is benefiting from Terra’s [LUNA] $30 billion DeFi loss
As the Terra blockchain collapsed, it decided to eliminate a lot of apps, including Anchor, which was the largest DeFi protocol on the chain at a given point. However, the protocol is worth nothing at the moment.
Furthermore, the fact that these protocols do have potential in their use cases, other chains are hounding them like vultures, including the Polygon network.
Polygon reels in Terra dApps
Bringing Terra’s protocols to Polygon will allow the latter for a faster recovery as these dApps once accounted for $30 billion, and with a more reliable chain, such a feat can be achieved again.
The CEO of Polygon studios, Ryan Watt and founder Sandeep Nailwal further confirmed this migration of protocols from Terra to Polygon.
Ryan stated that Polygon would be allocating capital and resources against these migrations to welcome the developers and their respective communities.
Sandeep also highlighted the growth that these DApps could have on Polygon and through SUPERNET for those looking for an app-specific change, including no restrictions on Validators/Bridge and the opportunity to make their chain a rollup.
However, the announcement did not bear any positive effect on the token as MATIC was noted trading 9% below its closing price on 15 May. A similar performance was seen on the investor front, wherein a scared more than confident approach was to be seen at the moment, owing to the market crash from a few days ago.
The devastating crash of 9 May that led to the MATIC token declining by 48.89% had recovered of 23.67%, but witnessed an 8% fall on 16 May with the token trading at $0.68.
The recovery did pull MATIC out of the oversold zone, but neither helped being about a change in the investors’ conviction as they would need more than such pity rises to save over 90% of all MATIC holders from further losses.
Given the gravity of the panic created, whales too did not hesitate to show their presence. On 13 May, whales ended up moving around more than $351 million worth of MATIC. However, none of this was actively sold in the market as per exchange balances.
However, selling activity was seen from some long-term holders who sold their holdings, in the process consuming 104.6 billion days. The only other time they sold their holdings was on 6 February, which was exactly a day before MATIC’s 16% rally.
Thus, while on-boarding developers may be easy for Polygon, bringing back investor confidence will take more than just a while.
Biggest Movers: XMR And SOL Higher On Monday
Despite BTC and ETH trading lower on Monday, several cryptocurrencies managed to move higher to start the week. XMR was one of the biggest climbers, with solana also moving higher during the session.
XMR was one of Monday’s biggest gainers, as prices rose by almost $20 from lows during Sunday’s session.
Following a low of $128.00 on Sunday, XMR/USD rallied to an intraday high of $174.62 to start the trading week.
Monday’s top came as prices surged for four consecutive sessions, hitting a near one-week high in the process.
Since these highs earlier in the day, XMR is now trading marginally below a ceiling of $173.00, as bullish strength faded as the day progressed.
The 14-day RSI is now trading at a resistance level of its own, which is below 43.14, and should it break, we could see XMR break resistance for the first time since March.
Should this happen, prices could move closer to the $200 region. A point which monero last hit only eight days ago.
Following three consecutive sessions of gains, SOL was also higher to start the week, however prices declined as the day progressed.
On Sunday, SOL/USD finished the day trading at $53, and went on to hit a peak of $58.88 during the early part of Monday’s session.
Since then, prices have slipped, and as of writing SOL is currently trading at a level of $52.32, which is close to a one-week low.
Overall, SOL has dropped by over $100 since the beginning of April, with prices dropping below $35 last Thursday.
Looking at the chart, the 14-day Relative Strength Index is now tracking at 33.26, which is marginally below a ceiling of 36.
Bulls are likely going to attempt to push prices towards $70, if price strength moves past the current obstacle in the RSI.
Could we see runs higher in upcoming sessions? Let us know your thoughts in the comments.
Eliman brings a eclectic point of view to market analysis, having worked as a brokerage director, retail trading educator, and market commentator in Crypto, Stocks and FX.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
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