The Tactical Trend And How We're Trading It

Louis Sykes
June 3, 2021

We can highlight as many charts and Altcoins as we like to demonstrate where things could be leaning, but with most things in markets, less is often more.

In this case, it's straightforward.

If 60% of the asset class, namely Bitcoin and Ethereum, can breakout from their current consolidations, the short-term trend is likely up, and it'd be wise to put some risk back onto the table.

Alternatively, if they cannot, and these patterns resolve lower - we should anticipate messier action for longer.

The current 2900 level in Ethereum is a big one here.

When we see such a confluence of interest like this, it's irresponsible NOT to pay attention. Here's an intraday chart of the current correction:

Ethereum's VWAP from all-time highs, last week's pivot highs, and the 38.2% retracement from the recent drawdown are all coming together at the same level. Don't expect sellers to make things easy here. They've already successfully tested this area twice in the last two weeks, confirming its importance.

A breakout here means we're likely in an environment where we want to put some money back to work from a tactical perspective. We'd be looking for a move back toward former support near 3,600 over the very short-term (which also happens to coincide with the 261.8% extension of the 2018 bear market, crazy how that works, huh?).

From a risk appetite perspective, it's an encouraging sign to see confirmation from the relative trend, with the ETH/BTC ratio also pressing to new highs and looking poised to resolve higher from a multi-week base, similar to the absolute price chart:

If both these upward resolutions are successful, we'd only anticipate leadership arising from the coins we've been pointing out in recent weeks - like Polkadot, Polygon, and Cardano, to name a few.

But to reiterate, these are short-term developments. The intermediate trend is still sideways at best.

While we're on the topic of short-term developments, let's take a look at how the Top Cryptos tracked yesterday:

Another day of leadership for Polkadot and Dogecoin...

With these performance-recap tables, we're always looking for leadership. So while this one isn't featured on the table, Theta is undoubtedly trying to take a leadership role at the moment:

Notice how its counterpart, Theta Fuel $TFUEL, is already pushing to new highs? There's a lot to like here if THETA is above 8 bucks, and we can own it with a target back to the former highs of 15.

But that's if and only if prices are above 8. Below that, and all bets are off. It's someone else's problem.

The same's true for Binance Coin $BNB, the third-largest Crypto with a market cap of $66B, about the size of Freeport-McMoRan or Norfolk Southern...

Now that prices are back near April's lows of 430, we're waiting for buyers to fully absorb any potential overhead supply at these levels.

We want to be buyers of BNB on strength above 430 if and when we get it with a target of 620.

There's today's scoop on Cryptocurrencies!

Please reach out if you have any questions.

Allstarcharts Team

[Note: these Crypto notes will be locked up shortly and will only be visible to Members of the NEW All Star Charts Crypto Daily Letter. You can Contact support to get added to the list]

Filed Under