Crypto-Roundtable Question
I've been invited to give my thoughts on the current bullish wave in the cryptocurrency space by  I just finished my response to them and I'm sharing it with you (they aren't paying me for it y'all are).  I'm also annotating this with the charts I reference in my response for clarity's sake.


Question: As Bitcoin is back above $9000, and the other cryptos have also been moving higher over the past week, has bullishness returned to the cryptocurrency market or is this a short term trend, and why?

I’m impressed with the performance of certain coins in the crypto-space. EOS, in particular, has been spectacular as its development team keeps hitting and exceeding its milestones. 

Bitcoin itself hasn’t been all that impressive in its overall performance simply because it is still, from a medium-term perspective, in dead-cat-bounce territory, running into strong resistance at the 23.6% Fibonacci level on the weekly chart.

That said, it has put in an impressive three-week rally to get to this point. I’ll be more comfortable calling a longer-term trending move if Bitcoin can get through this resistance around $9270 and make a push towards $11,300, the 38.2% Fibonacci line. I’m not a huge fan of Fibonacci levels but the crypto-markets tend to follow them very closely, so my opinion of them is irrelevant.

Cryptos like Ethereum ignored that first Fibonacci level and is headed to the 38.2% line at around $765. But, then again, Ethereum’s run last fall was far less impressive than Bitcoin’s or Ripple’s. So, the technical picture has to be attenuated for that.

All in all, I would say that bearishness is leaving the sector thanks to the end of U.S. tax season which forced a lot of liquidations and allowed for professionals to, rightly, keep pressure on the market and force out the weakest hands. 

That said, there are a number of coins still languishing below important technical levels, Litecoin, for example, which indicates that there is still a lot of work to be done in rebuilding the bull case those coins that did so well in 2017. 

Remember, Litecoin began 2017 at just over $4.00. Today it’s mired in a bear market at $150? In investing and trading time perspective is paramount. So, while the short-term trading charts (daily and weekly) are turning bullish and provide some trading opportunities, the longer-term charts, monthly, quarterly, yearly are still bullish.

When you look at the monthly chart of Litecoin all of 2018’s trading action fits with the opening and closing prices for December 2017. Technically there has been no reversal signal given in Litecoin even though it’s trading 65% below it’s all-time high. But, from a quarterly perspective it would now take a close in June below $47.00 to constitute a two-bar quarterly reversal. That, to me, would signal an end to the long-term prospects for Litecoin. 

I think investors should be looking at coins/tokens they have operational and development confidence in that have put in strong bottom or double-bottom formations here in 2018 that are below the first Fibonacci level (23.6%) as traced from their December high to their Q1 low. 

Those will be the coins that likely out-perform the rest of the market when the bellwether’s have finished repairing the worst of the technical damage. And any coin/token that is still flirting with its Q1 low without a strong development roadmap needs to be reviewed/jettisoned from their portfolio.

In short, investors are returning to the space. Poor liquidity will move price a lot in the short-term but that doesn’t constitute a new medium-term bull market until the price charts confirm them.  Most cryptos still have very bullish long-term charts, including Bitcoin.

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