Bitcoin, dogecoin and other cryptocurrencies have been trading incredibly well. Here’s how they look now.
Cryptocurrencies sure have been enjoying the last couple weeks of trading, with bitcoin, ethereum and dogecoin surging off the lows. That’s got the miners moving too.
While the equity markets have enjoyed the last few trading weeks, so has this group. To see both rallying adds to the “risk-on” observation, in my opinion.
Granted, these groups — tech and crypto — have been crushed, so some sort of bounce should be expected. That said, it’s gone further and longer than most investors had expected.
When I look at bitcoin, I see a 27.5% rally from the mid-March low to Monday’s high. In that stretch, it has been up in 11 of the last 15 sessions and has now closed higher in seven straight sessions.
How much longer can the rally continue? Let’s look at the charts.
Trading Bitcoin
Daily chart of bitcoin.
Chart courtesy of TrendSpider.com
On Sunday, bitcoin made what I refer to as a “deliberate” breakout. The reason I call it deliberate is because the asset pushed through several significant levels when it could have easily rallied to this area and failed.
But no. Bulls deliberately jammed bitcoin up through this key zone. That zone was $45,400 to $45,900.
In that area, we had prior support turned resistance ($45,400), followed by last month’s high at $45,900. Clearing February’s high gave bitcoin a monthly-up rotation. However, this zone also included the 50-week and 21-week moving averages, as well as the weekly VWAP measure.
Given how many measures were in this area, it would have easy for bitcoin to pullback, especially with that nice streak of daily gains.
Now pushing higher, I want to see how it handles channel resistance and the 200-day moving average. If it can clear these measures, it puts $50,000 in play, followed by the 50% and 61.8% retracements, respectively.
On the downside, bulls would love to see the $45,400 to $45,900 area hold as support, along with the 10-day moving average. Below that and the 50-day could be in play.
Trading Dogecoin
Daily chart of dogecoin.
Chart courtesy of TrendSpider.com
As for dogecoin, it could have some more upside provided that it can get through the 15 cent level. If it can do that, dogecoin could push up to the February high near 17.3 cents.
Above 17.3 cents and dogecoin will be looking for a test of its 200-day, followed by a possible push to the 19.5 to 20 cent area.
While these sound like small moves, a rally from 15 cents to 20 cents would represent a gain of ~33%.
If dogecoin needs to pull back — as it’s up in seven of the past eight sessions — let’s see if the 10-day and 50-day moving averages are support.
