Crypto Outlook | More upside after the current short- squeeze?

Fundamental Data

The renewed weakness of the US- dollar helped the crypto market to gear up sharp momentum. Despite the mixed risk sentiment in the equity market, Bitcoin as well as Ethereum were able to rise sharply. The bullish moves came alongside the rise in the precious metals market and might also be a relief for “hodlers” after prices had been falling in recent months. The general trend seems to come from the derivatives market. According to market observers a short squeeze caused the sudden run to the upside.

To generate further upside the crypto market needs to see more purchase power now to overcome the bear market. Once the short squeeze will be over new buying activity on the spot market needs to follow. If buyers remain absent prices might fall back towards recent breakout levels.

In general, the market sentiment might also remain positive due to other reasons. The seasonal pattern should soon point to further upside in the market. Analysts of the asset management company VanEck pointed out that the bear market should end in September. 

Technical Analysis

BTC – Bitcoin is trading at 76,238 USD. The price of the token was able to break higher, finally breaking recent resistance zones. As long as BTC will remain above the psychological 70,000 USD level the upside might continue.

BTCUSD weekly chart

According to the weekly chart above, Bitcoin should also attempt a break of the 50- moving average zone. A push beyond this level should be seen as extremely positive. Based on historical price patterns the market respected such areas often as support or resistance line. 

ETH – Ethereum is currently trading at 2,415 USD. The price of this token has been rising similarly to Bitcoin. Currently, the market remains at an important zone, which needs to be crossed in order to generate more upside momentum. ETH needs to push beyond the 2,500 USD level. 

ETHUSD monthly chart

That zone marks a strong horizontal resistance level. Also, the 50 -moving average line based on the monthly chart above can be found there. A push higher might unleash fresh upside momentum. The 3,200 USD area might then be on the cards quickly thereafter.

XRP – Ripple is currently trading at USD 1.4773. After the price kept moving to the downside in recent month, finally some upside can also be found in Ripple. Yet, the market stopped at an important resistance zone. 

 XRPUSD daily chart

Based on the daily chart above, the price failed to break the 1.5400 USD resistance. A closer look at the weekly chart reveals that this level also coincides with the 50- moving average level, which will also act as a burden for now. If the price fails to cross that level, the return to the downside might happen.

SOL – Solana is currently trading at USD 92.90. Upside can also be observed in Solana but the market has not been able to rise compared to the other tokens analyzed before. Based on the weekly chart below the price keeps fading off the 50- moving average zone.

SOLUSD weekly chart

The zone around the 105.50 USD level might inhibit the market to rise further. That level has been a strong support zone in April last year and needs to be crossed in order to offer fresh upside momentum. Only if the rally in Bitcoin will continue the positive important for the altcoin market might as well be found.