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The cryptocurrency market led by Bitcoin (BTC) rose this week, but the resurgence stalled momentarily, with the maiden digital asset appearing to consolidate at around the $67,000 level.
Overall, the market remains on edge regarding the next movement, especially for Bitcoin and altcoins. In this line, crypto trading expert Credible Crypto (Credibull), in a YouTube video posted on May 19, shared insights and outlook for several digital assets before what he termed taking a break. Below are some of the cryptocurrencies highlighted by the expert.
Bitcoin (BTC)
The analyst noted that if Bitcoin is to experience a significant downside move, it should happen from the main resistance area, currently around $71,000. He identified $62,300 to $63,300 as a potential bounce zone, with $59,000 being the ideal target if this area fails.
He elaborated on the factors to watch for to determine Bitcoin’s next move. Two key indicators include an impulsive move off the lows and the behavior of open interest (OI). Credibull noted the absence of an impulsive move and a concerning ramp-up in OI, suggesting potential for a corrective move rather than a bullish breakout.
The analyst warned that if Bitcoin fails to break through this resistance level convincingly and OI remains high, it could lead to a significant price correction, possibly back to the $59,000 level.
“I’m cautious right now. I’m not super bullish as we push up into major resistance with a ramp-up in OI back to the levels that we were at before we broke down,” he said.
Dogecoin (DOGE)
Transitioning to altcoins, Credibull expressed interest in shorting Dogecoin (DOGE). He highlighted that his primary area of interest for shorting Dogecoin lies around the $0.18 mark. He explained that this level offers an ideal risk-to-reward ratio for short positions.
The analyst called for patience, stating that he would not initiate a short position until Dogecoin reached the $0.18 zone. He acknowledged the possibility of several scenarios playing out before this level is hit.
For instance, Dogecoin could experience a pullback, potentially moving down and bouncing back up to the short zone. Alternatively, Dogecoin might directly ascend to the short zone without a significant Bitcoin pullback.
Regardless of the immediate movements, Credibull stressed that his strategy is not driven by emotions but by technical analysis and risk management. He pointed out that entering a short position below the $0.18 mark could expose traders to unnecessary risk, especially if the market experiences a bullish breakout.
Solana (SOL)
For Solana (SOL), the analyst identified vital resistance levels and potential shorting opportunities. He mentioned that Solana has room for a 5% to 10% upside. The expert pinpointed a move above the previous highs above $180 as the optimal short entry.
He expects a rejection at this level, followed by a significant move down to the range lows, around $115. This represents approximately a 35% move from the current levels to the downside.
Credibull also highlighted the confluence of resistance levels on the SOL/USD and SOL/BTC charts, reinforcing his bearish outlook. He pointed out that both pairs are hitting key resistance zones, making them prime candidates for short positions with a favorable risk-to-reward ratio.
Chainlink (LINK)
In his analysis for Chainlink (LINK), Credibull noted that the token has been on a prolonged upward trend for almost a year, with only two months of correction, which makes a deeper retracement likely.
Credibull identified a point of breakdown and a subsequent range between $16 and $12 that LINK has established. Currently, LINK is pushing into an area of resistance around $18, making it an ideal spot for a short position. He emphasized the importance of either shorting directly into this resistance or waiting for a structural shift and falling back into the range to confirm the short.
One of Credibull’s critical indicators for the LINK short is the massive rise in open interest during the recent push to the upside. This increase suggests that many leveraged players have entered the market, creating a potential for significant downside if these positions start to unwind.
He identified a target move back down to around $11.96, which, from the current levels, represents a 27% to 30% move to the downside.
Dogwifhat (WIF)
Credibull noted that while WIF has broken down from a lower level, there is still ample downside liquidity, suggesting the possibility of a fakeout after consolidation. He cautioned about initiating a short position on WIF until it recovers further and potentially reclaims higher levels.
One key reason Credibull is hesitant to short the meme coin at its current level is the risk-reward ratio. He emphasized the importance of waiting for rejection confirmation at resistance before considering a short position.
The expert also highlighted the significance of shorting at extreme areas, such as the range highs, to minimize risk and maximize potential returns.
Overall, despite the technical indicators, the mentioned cryptocurrencies are highly susceptible to general market sentiment.
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