What To Watch If Bitcoin Confirms A Phase Change Over The 200-DMA
Michele Schneider | Aug 10, 2021 12:39AM ET
Monday, Bitcoin cleared its major moving average while Ethereum, the second-largest cap currency, tested its new support level at $2900. For the moment, this shows the crypto space can hold its weekend progress.
Often, the weekend can be pivotal for cryptocurrencies since they are given more attention when the stock market is closed. That being said, last week we covered companies within the crypto space that would benefit if price action held in the large cap coins.
Next, we can focus on altcoins and the continuation of this trend based on new support in the large-cap currencies.
Starting with Bitcoin (BTC), now that it’s over its 200-Day moving average at roughly 45k, it will need to hold this price level as a new support level. Since the 200-DMA is a popular MA it will only boost investors sentiment if this level can hold. Additionally, if BTC has a second daily close over the MA, it will confirm an accumulation phase.
On the other hand, Ethereum (ETH) is sitting in a bullish phase with its price trading over the 50-DMA and the 50-DMA over its 200-DMA. With that said, the rise in large-cap currencies is pushing similar price action in altcoins.
For example, two we have been watching are Cardano (ADA), and Polygon (MATIC).
Like ETH, both dipped below their 200-DMA before reversing trends. When it comes to support and resistance levels, MATIC will need to hold its 50-DMA at $1.02 as new support. If it holds this area, we could see it make a run back for highs around the $2.50 price level.
Since ADA is already over its MAs, it will need to create a new support level over current resistance at $1.49. Although it has been testing that area for the past 3 trading days, it has yet to hold over the $1.49 price level. After that, the next resistance range for ADA comes in at $1.83.
While these currencies are showing potential trade setups, crypto-traders should always remember to time their trades alongside the major currencies (BTC and ETH).
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That means if BTC and ETH begin to have trouble with their current breakout price levels, be cautious as the rest of the space could run into the same type of price action and volatility.
h2 ETF Summary/h2- S&P 500 (SPY) Holding highs with support at 436.
- Russell 2000 (IWM) Still needs to clear 225 resistance.
- Dow (DIA) Needs to hold 351 as support with more at 347.
- NASDAQ (QQQ 366.65 minor support the 10-DMA.
- KRE (Regional Banks) Needs to clear the 50-DMA at 65.45 and hold.
- SMH (Semiconductors) 263.86 support area.
- IYT (Transportation) 253.50 resistance area.
- IBB (Biotechnology) New Highs.
- XRT (Retail) 97 resistance.
- Junk Bonds (JNK) 108.65 next support area.
- IYR (Real Estate) Showing resistance near highs. 105.22 support area.
- XLP (Consumer Staples) 70.48 support the 50-DMA.
- GLD (GoldTrust) All out.
- SLV (Silver) Needs to find its next support area.
- XME (S&P Metals and Mining) Like this back over the 50-DMA at 43.75.
- USO (US Oil Fund) 45 support.
- TLT (iShares 20+ Year Treasuries) Watching 200-DMA as next support at 146.94.
- USD (Dollar) 93.19 resistance to clear.
- DBA (Agriculture) 19.05 gap to fill.
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