February 16, 2022
Cryptocurrencies: Daily Update
Most of the cryptocurrency market players are continuing to use caution when it comes to entering positions in more speculative altcoins, especially as we still sit at a significant inflection point in our key market benchmarks.
Both Bitcoin (BTC) and Ethereum (ETH) are being watched for the potential to complete nearly identical inverse head and shoulder patterns.
Although both of our crypto market benchmarks are showing the same pattern, there are a few slight differences between these setups.
First, you’ll notice that the neckline on BTC has a positive slope, while ETH neckline is sloping negative. More importantly, the projected target level for BTC based on its count in the current pattern is roughly around the $54,000 price level, while ETH is projected to target $4,600 if it breaks out above its own neckline.
From current prices, this would be a roughly 24% price increase for BTC vs. a 35% projection on ETH, signifying that if both coins confirm an inverse head and shoulders bottom that Ethereum will likely outperform Bitcoin on a relative basis.
The last factor to consider is that if these two symbols do in fact confirm over their respective necklines, ETH is projected to explode to levels very near its previous all-time high of $4,867, while Bitcoin would still be relatively far from retesting its own $69,000 all-time high.
If we do see a significant breakout, expect ETH to have more fuel in the tank especially if the coin manages to set a new all-time high.
We are delighted to see Avalanche (AVAX) leading large-cap cryptocurrencies on Wednesday morning, especially after our CryptoPulse Quant model generated an entry for the coin on Tuesday.
At the current moment, AVAX is the only top 10 cryptocurrency by market cap that is recording a positive price performance on a rolling 24-hour basis.
There are quite a few takeaways from AVAX right now, but one of the most significant things to notice is the bearish divergence emerging between price and the 50/200 RealMotion.
Thanks to a powerful move during Asian trading hours on Tuesday, AVAX has blown through its 50-day moving average and has reclaimed a bullish phase, catching up to the 10/50 RealMotion indicator that reclaimed its own bullish phase 1 day before price did.
Meanwhile, the longer-term 50/200 RealMotion indicator looks like it will reclaim a recovery phase by tomorrow’s close. There is still a ways to go before our longer-term momentum indicator can attempt to improve to a bullish phase.
The caveat with AVAX at the moment is that it looks to be potentially overbought in the short term, according to Bollinger bands on both price and shorter-term RealMotion.
We’re expecting AVAX to likely mean-revert to the downside a little bit before attempting to make another leg up. If this scenario does play out, expect the coin to maintain support above its 50-day moving average, with the worst-case scenario being a break below the $79.29 support level and a retest of the 200-day moving average.
Upside resistance at $96.91 is very close to Avalanche’s current price of $95.81, and a confirmed break above this level would wipe out the negative trend that has been intact since mid-November 2021.
**If we discussed a cryptocurrency that you would like to trade but isn’t offered on your current crypto exchange, please see coinmarketcap.com in order to view a profile on any tradable cryptocurrency, as well as a list of exchanges that do offer the coin for trading.**