Altcoin Friday!
Uncertainty has been prevailing in the cryptocurrency market for a while now, and since the drop of BTC from $30k to $26k, this uncertainty has only escalated, resulting in extreme weakness in altcoins. The market's uncertainty is further intensified by very tight consolidations that are consistently followed by highly volatile movements. This is a consequence of the imbalance between open interest and market liquidity. Due to the high open interest, price movements are very explosive, as the liquidations that occur cannot be absorbed due to insufficient liquidity. This is primarily a result of the disappearance of major market makers since the LUNA and FTX crash. As a result of the weakness in BTC and ETH, altcoins are also facing significant challenges. Currently, we observe that during every 0.5% drop in BTC, altcoins decline between 5 and 10%, indicating extreme weakness. For this reason, it is advisable to be very cautious and avoid forcing trades. Many altcoins simply appear very weak, making it not even worth paying attention to them. In this edition of the tradeletter, I will highlight a number of altcoins that I am interested in. These could include both long and short positions, as I currently find BTC highly unpredictable.
ETH-USDT
1day-timeframe
ETH is currently facing challenges similar to BTC, and we can observe that ETH has dropped below the support zone of $1700. The price is struggling to reclaim this zone, and as long as ETH remains below this zone, it is advisable to consider looking for short scalps instead of long positions.
4-hour timeframe
On the 4-hour timeframe, we can observe that ETH has swept all the highs, indicating a failure to establish a higher high. For this reason, in combination with the higher timeframe, I anticipate that ETH will trade lower in the coming days. Additionally, we see two long wicks formed on the downside where there is likely a significant amount of liquidity, and as we know, whales are likely to target this liquidity pool. The targets for short positions are therefore: $1580 and $1552.
RUNE-USDT
1-day timeframe
Looking at RUNE, I anticipate that it will experience a significant further drop in the coming days/weeks. This appears to be a classic pump and dump pattern, which we have seen occur multiple times in the current market, such as with XRP. RUNE has absorbed all the liquidity on the upside, further strengthening my bearish bias. I expect this liquidity to be used to ultimately push RUNE back down towards $1.10-1.20.
4-hour timeframe
Currently, we are observing how RUNE is perfectly respecting the 4-hour Fibonacci volatility grids (fvg's), with the price consistently exhibiting a bearish reaction after touching the fvg. For this reason, I would consider looking at shorts in the range of $1.52-1.59, as an untouched 4-hour fvg is located there. If the trend continues, which aligns well with the higher timeframe, this 4-hour fvg seems to be the ideal area to initiate shorts targeting the range of $1.10-1.20.
SUI-USDT
4-hour timeframe
There's one coin that has piqued my interest for a long position, and that's SUI. SUI is a relatively new coin that is shaping up nicely for a range trade. We can see that SUI traded below the range low for a short period, which could be considered a manipulation phase. After this manipulation phase, SUI has shown strength and formed a higher high. With this higher high combined with the reclamation of the range low, we can expect an uptrend to emerge from here towards the higher resistance zones within the range. The 4-hour order block, indicated in green, can be used for potential long positions. However, it's advisable to wait for additional confirmation as both BTC and ETH are currently very uncertain.
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