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Crypto Markets Indecisive as Bitcoin Bulls Slow Down: Technical Tuesday

2020.06.09 Hunain Naseer

In brief

  • The cryptocurrency markets remain indecisive as Bitcoin (BTC) price fluctuates within a narrow range.
  • Data shows that the current short-term consolidation could be a good setup for a further rise in BTC prices.
  • Ether (ETH) bulls look tired as $250 remains a significant resistance level, while Litecoin (LTC), Tron (TRX) and Kyber Network (KNC) join the spotlight.

Market overview

The cryptocurrency markets were indecisive on Tuesday morning in Asia, as BTC prices continued trading sideways, changing hands near the $9,700 handles, while Bitcoin Cash (BCH) and Ripple (XRP) were slightly in the green. 

BTC’s short-term indecision in the current range may hint towards the potential for further price appreciation. A survey from Sentix shows that the Bitcoin Overconfidence Index has increased to +7, which could explain why BTC bulls seem to have slowed down. However, Patrick Hussy, Managing Director at Sentix, said that the basic conviction is holding firm, and consolidation for 1-2 weeks can help BTC prices rise again.

Bitcoin Sentiment
Sentix Bitcoin Overconfidence Index. Source: Sentix

Sentix Overconfidence Index measures the probability for the case that consecutively rising or falling prices have led to an augmented complacency among investors. Readings below -7 or beyond +7 are usually a sign that consolidations or corrections are imminent.

We can expect BTC’s market dominance to be back in focus, as it has historically bottomed out around 65 percent, where it currently stands. If it rebounds from here, it would reflect the market’s increasing demand for Bitcoin relative to altcoins.

Bitcoin Dominance
BTC Market Dominance (%). Source: Tradingview

In the altcoin space, we believe Tron (TRX) will remain in focus as we expect news surrounding its 4.0 upgrade to remain the primary price driver. Basic Attention Token (BAT), on the other hand, continued its rally to almost 0.26 levels despite news of the Brave browser reportedly redirecting its users to the company's referral links when navigating to different platforms.

Price Analysis

BTC/USDT – retest support before going up?

BTC/USDT remained in a triangle formation as the price mostly moved sideways in the past week. However, BTC may retest the triangle’s lower support before producing a breakout, especially since the RSI has produced a lower high (relative to the price) this week, which is considered a bearish divergence. 

The stochastic also has been moving lower, and despite the chance that the fast line may go above the slow line, the two indicators, at the time of writing, show that the upside momentum has been somewhat fading.

However, the Ultimate Oscillator has ticked up early this week and may indicate that the downside bias is limited.

Level-wise, the lower support of the triangle is between $9,300 and $9,200 — anything below that could increase the downward momentum. While on the upside, last week’s high of around $10,400 remains the ceiling.

BTC USDT Chart
BTC/USDT daily chart. Source: OKEx; Tradingview

ETH/USDT – bulls are getting tired

A correction could be on the way for ETH/USDT as the bulls seem to be getting tired, and the bears may soon takeover. Despite multiple attempts to break above $250, it remains a strong resistance for ETH and multiple momentum indicators are also hinting towards a short-term correction. The MOM indicator has produced a bearish divergence, while the MACD has been narrowing.

On the downside, the 78.6 percent Fibonacci retracement near $223 could be the first level to watch. After that, we may see further correction towards $210. On the other hand, if the support at $250 is confirmed, it could lay the foundation for testing the February high of $288, though it seems unlikely in the short-term.

ETH USDT Daily
ETHUSDT daily chart. Source: OKEx; Tradingview

LTC/USDT – a make it or break it moment?

LTC/USDT has been trading sideways after another failed attempt to break the $50 level last week. The seventh-largest cryptocurrency may need an imminent rebound before the bears take over.

The price currently rests on the middle line of the Bollinger Bands, and a crossing to the bottom may support the case for a reversal. The RSI is also resting on the recent channel’s support, and a break down may erode positive momentum.

On the downside, $44 could be the first level to watch, followed by $41.

LTC USDT Daily
LTC/USDT daily chart. Source: OKEx; Tradingview

TRX/USDT – correction could be due

Technical indicators suggest that TRX/USDT could remain overbought and a correction could push the price back to the channel’s lower support.

The RSI has been flirting with the overbought zone over the past few days, while the Williams %R remained over -20 percent. Both readings indicate that the pair has been overbought, and the Stochastic bearish crossover confirms the signal. $0.01620 remains a level to be watched.

TRX USDT Daily
TRXUSDT daily chart. Source: OKEx; Tradingview

KNC/USDT – likely to test resistance-turned-support after breakout

KNC/USDT has been one of the best performing altcoins on the OKEx trading platform in Tuesday’s session, surging more than 16 percent.

The jump produced a breakout from the recent triangle pattern, and also pushed the price further into the overbought zone, as the RSI and the William %R both confirm.

Although the pair appears overbought, it may not undergo an imminent price correction. KNC is likely to first retest the area between $0.753 to $0.757, to see if it can be turned from resistance to a support level.

However, the trading volume may worry the bulls since it reflects a bearish divergence from the price.

KNC USDT Daily
KNCUSDT daily chart. Source: OKEx; Tradingview

Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involve significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary


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