Bitcoin (BTCUSD)
Above: Bitcoin (BTCUSD) 4-hour chart
The above chart is Bitcoin’s 4 hour chart. The rally Bitcoin saw on Monday was phenomenal – but on a smaller scale. If we don’t see higher passages during Tuesday’s trading session, we will likely see lower bitcoin trading. I like an aggressive short entry between 56,000 and 5300. One could argue that Bitcoin completed a correction wave at 54,000. This would mean that Bitcoin could return to test the 44500 range of values. How did I get this number? Simple – it’s the 100% Fibonacci expansion from the 57620 swing high, the last swing low at 47044, and the Monday swing high of 54400. However, if Bitcoin traded above 57,000, the short idea would be invalid. Additionally, the cryptocurrency market is still overwhelmingly bullish so I would look for a strong buy at the major Ichimoku levels at 51110 and 50700.
Polkadot (DOTUSD)
Above: Polkadot (DOT) 4-hour chart
Polkadot has a very similar setup to Bitcoin. Using the 4 hour chart, we can see the same Elliot Wave structure that is present with Bitcoin (although it’s a sloppy version of Elliot Wave). The 100% Fibonacci expansion on Polkadot’s chart put price was at 24.44 – a significant drop from the currently trading level at 33.50. One of the main reasons the short here at 33.50 looks like a good setup is the state of the RSI. The RSI is at 55, which is the overbought level when an instrument is in a downtrend. We can also observe that% B is ready for a cross below the 0.8 level. There are some distinct bearish differences between price action and the composite index. I’m getting some very strong signals to look at the short side of Polkadot’s price action this week.
Cardano (ADA)
Above: Cardano 4-hour chart
Cardanos Chart has the same bearish setup as Bitcoin and Polkadot in the short term. For Cardano, frustration for cops must be high. Cardano spent almost 60 days in a proper consolidation area and it looks like it is testing lower – this is almost certainly likely as Bitcoin falls to test the 44500 levels. I like the short term short trade for Cardano between 1.30 and 1.19 with a profit target near 0.85. The same swing structure that I used in Bitcoin and Polkadot is used in Cardano’s diagram – 0.85 is the 100% Fibonacci extension of this swing structure. Hence 0.85 within the same support range that we have discussed over the past few weeks. I would expect a test of this level to buy up as quickly as it was a few days ago. Watch out for the oscillators though as the short side of this market is likely to be in the cards, but the consolidation for Cardano has been extensive and any higher move could create a series of new all-time highs for Cardano.
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