Weekly Cryptocurrency Market Outlook May 22

May 23, 2017

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BTCManager’s Weekly Cryptocurrency Outlook highlights the price action and technical indicators on a long-term basis to identify the best opportunities in the largest cryptocurrencies, such as bitcoin, ether, and others.

BTC-USD (Bitstamp)

Bitcoin has surged past the $2000 psychological level on May 22, marching toward the Fibonacci resistance at $2356.12. The daily price action is shown below, along with the Fibonacci extension levels, which provide resistance at $2356.12 and $3107.12 over the long run.

Volume has increased on May 22, supporting the move higher and the Market Facilitation Index is green, indicating that traders should just follow the momentum and try to get into long positions. The Awesome Oscillator also indicates that the market is more prepared to move BTC-USD higher, as the indicator remains green in color and moves higher.

The conversion line (blue) moves sharply higher, indicating that short-term equilibrium price for bitcoin is rising. The conversion line offers support around $1935 and shows that the short-term equilibrium price may also cross above $2000, which will provide further bullish confirmation.

The weekly price action for bitcoin on the Bitstamp exchange is displayed below. It is clear that the latest we will see the peak of the current bull run is the week beginning July 24. The chart below shows that since establishing a fractal low at $891.33, the market has gone onto make eight near consecutive record highs. A record high is part of the count as long as no more than two candles following have a lower high and the next candle shows a higher high. Using this logic, we see that eleven record highs could be established by the week beginning July 24.

After establishing eleven or so record highs, the market will be suggested to be exhausted and it will be the optimal time to enter into short positions or sell bitcoin and lock in profits.

The Market Facilitation Index for the week is a ‘fake,’ suggesting that market participants should not pay too much attention to this week’s price action, as it is indicated that there will be some manipulation.

ETH-USD (Kraken)

Ethereum’s cryptocurrency, ETH, has surged on May 22 as the Consensus event kicked off, where the Ethereum Enterprise Alliance added more than 80 new members. ETH-USD has achieved the Fibonacci target at $132.58 and attempted the next extension level at $180 but has since retreated to $165. Further resistance is found at $210.19, the final Fibonacci extension level, suggesting that ETH-USD may fail to hold onto gains above $210.19.

The weekly price action on Kraken is shown below, with targets at $180.54 and $210.19. On the other hand, the conversion line provides support at $100.

Looking at the daily timeframe, we see that the Fibonacci extension levels go as high as $264.37 when looking at the more recent structure. The steep upward slope of the conversion line (blue) and the Ichimoku cloud signal the strong bullish momentum that is behind the current move.

XEM-BTC (Poloniex)

All of the Fibonacci targets have been achieved for XEM-BTC suggesting it is an optimal time to short the pair. The conversion line is flat and indicates support around 7500 satoshis, which would serve as an initial target for bears. Also, the market has displayed eleven consecutive record highs, suggesting that bulls will exhaust themselves soon.

However, looking at the monthly chart we see that a very reliable bullish signal may be given once the candlestick for the month of May is complete. Therefore, we could get a very profitable entry into a long position on June 1 once the signal is given.

LTC-USD (Btc-e)

The weekly price action for litecoin is displayed below and a fractal sell level at $36.30 forming is imminent. The Fibonacci levels provide some indication of where the downward momentum will falter. The 50 percent Fibonacci retracement aligns with the support provided by the conversion line at $19.97. Therefore, limit buy orders should be set around this level. Alternatively, we can set limit buy orders at the 61.8 percent retracement level at $23.82 or just above the resistances at $28.59 and $36.30.

A break of the recent high at $36.30 opens up the first Fibonacci extension level at $56.47. A weekly close above $28.67 will also open up further upside, as the peak of the lagging line indicates resistance at this level.

DASH-USD (Poloniex)

The chart below gives two bearish signals on the weekly timeframe for DASH-BTC.

Firstly, the Ichimoku cloud has turned from green to red, warning of an impending downward trend. Secondly, a switch from bullish to bearish momentum is signaled by the conversion and base lines. We see below that the conversion line is starting to move below the base line (red), telling us bearish momentum will start to dominate.

Therefore, we anticipate DASH-BTC to tend toward the Ichimoku cloud and return to equilibrium.

ETC-BTC (Poloniex)

The weekly price below for Ether Classic paints a bullish outlook, as the market closed above the conversion line last week, breaking an important resistance. We should see the conversion line offer support going forward and the market will now tend toward the most recent fractal resistance at 0.005488. Further resistances lie at 0.00568 and 0.00995.

A bearish outlook is only necessitated if the weekly close is lower than the conversion line, that is lower than 0.0037.

XMR-USD (Kraken)

Last week’s price action gave a bullish signal, as the candlestick closed higher than the resistance provided by the lagging line (purple) at $31. The Fibonacci retracement also indicates that the next resistance is found just below $50, at $49.26. Further resistances lie at $63.64 and $72.52

It is interesting to note the how far the structures of different cryptocurrencies have played out. With Ether and XEM close to the fourth and final Fibonacci extension levels, XMR has just crossed the first Fibonacci level, which provides support at $34.88.

Also, notice that the conversion line (blue) is flat and held as support over the past two weeks, suggesting that it was optimal to buy in around $27 and foretells of further upside. The move higher last week was supported by greater incoming volume, suggesting the upward move can be sustained. Therefore, we expect XMR-USD to tend toward $49.26 and $63.64 over the medium term.

DOGE-BTC (Poloniex)

Dogecoin showed massive gains last week, and pushed above the Ichimoku cloud, closing around 0.00000148 the highest since early 2014. The market also closed above the fractal resistance at 0.00000137, suggesting bullish momentum will continue. However, another fractal resistance lies at 0.00000148, so we wait for the weekly close before deciding on the enxt course of action.

A weekly close below 0.00000137 will point to a bearish outlook, whereas a weekly close above 0.00000148 will open up an important resistance, as indicated by the lagging line, at 0.00000250.

GAME-BTC (Poloniex)

Gamecredits (GAME) has closed higher than a fractal resistance, giving a strong indication of bullish momentum to come. Last week, the candlestick closed at 0.0013812, above the Fibonacci extension level at 0.00130818. Therefore, we should see the altcoin attempt the next extension level at 0.00202368. Large volume was seen on the Poloniex exchange, supporting the move higher and foretelling of further appreciation in GAME-BTC.

Notice also last week’s close was higher than the most recent fractal, which is at 0.000866, suggesting bullish momentum will continue to dominate in the weeks ahead.