Cryptocademy Issue #9 - Is the Correction Over?

The crypto market is coming off a brutal couple of weeks.

While Ethereum has held up relatively well and even carved all-time highs recently, Bitcoin is still down 16% from its recent $64,854 high.

Altcoins like VET suffered even greater losses.

The market has come back a bit from its local lows, but is the correction over?

In today’s newsletter, I’ll share my opinion on the technical damage that was done in April, as well as what markets need to do to get back on track.

Let’s get it!

The total crypto market cap chart has been my barometer for this correction.

The market’s recent break below the December trend line near $2T was my cue that a broader correction was coming.

You can see where this past weekend closed below the $1.815 key level.

However, it seems the January trend line near $1.75T prevented further downside.

Today’s session tested the next key resistance just below the $2T mark.

A close above that could take the market back to the $2.3T area.

On the other hand, a failure from the $2T resistance area followed by a close below $1.75T would open the door to $1.45T.

Bitcoin kicked off the latest correction with a 15% dump on April 18th.

Hours before that, I was tweeting that I didn’t like the look of the BTCUSDT chart so far in 2021.

Bitcoin has since closed below the December and October trend lines.

That leaves resistance near $55,000.

If buyers can get above that on a daily closing basis, we could see Bitcoin move back to retest $60,000.

That level, along with $65,000, will be critical in determining the next leg higher for BTCUSDT.

Alternatively, a rotation lower would likely find immediate support at $51,300, followed by $47,000.

A daily close below that, and we’re probably looking at a move to the $42,000 to $43,000 region.

Ethereum has had a volatile couple of weeks.

After reaching an all-time high of $2,548 on April 16th, ETHUSDT dropped 24% over the next three days.

ETH then bounced from $1,950 support all the way to a new all-time high just a few days later.

Fast forward to today, and ETHUSDT is right back to carving all-time highs above $2,700.

There is a lot of resistance near $2,730, so we’ll see if that’s a factor going forward.

Key support comes in at $2,610, $2,500, and $2,200.

A daily close above the $2,750 area would open the door to the much larger ascending channel just below $3,000.

VETUSDT closed back inside a long-standing ascending channel last week.

It appears the parabolic move above channel resistance wasn’t built to last.

That leaves the area between $0.22 and $0.23 as resistance this week.

Support comes in at $0.145, $0.125, and $0.10.

As I’ve mentioned on Twitter recently, the top of this channel intersects with $1.85 in August and $3.10 in September.

That doesn’t mean VET will reach those figures, but it does highlight just how bullish this ascending channel could be later this year.

ADAUSDT broke down from an ascending triangle on April 19th.

This was a possible scenario I mentioned in the last newsletter.

The measured objective of that pattern would put ADA between $0.70 and $0.80.

Although it hasn’t reached those levels, at least not yet, it did hit $0.92 late last week.

At this point, buyers need to secure a close above the $1.40 area to convince me that this correction has run its course.

However, ADA still needs to climb above $1.50 on a daily closing basis to confirm the bullish breakout and signal the start of the next leg higher.

Key support is $0.90, $0.80, and $0.70.

My name is Justin Bennett, and I began my financial markets journey in 2001, trading mostly penny stocks. I later transitioned to Forex in 2008 and managed to make trading and investing a full-time gig starting in 2012, and I’ve been doing it ever since.

Admittedly, cryptos have become my #1 passion, and Cryptocademy is my vehicle to share my knowledge with the crypto community.