Around 12am, 31 May 2019 (UTC +8), Bitcoin hit the grand $9,000 mark and the Bitcoin $9000 meme started circulating around again on social media like Twitter. However, this was short lived and price wasted no time getting back below $9000. Today, I want to talk about the potential risk off situation regarding Bitcoin, Ethereum and Ripple.
Top 3 cryptocurrency analysis
When euphoria hits the masses, it’s best to stay cautious. When Bitcoin hit $9000, it spiked and reversed the high, which creates what we call a “Bull-trap”. A bull-trap implies that it traps buyers who bought the price breakout, which was $9000 in this case.
In my previous analysis, I mentioned that buying around $8000-$8400 would be a nice place to buy. It’s evident that price bounced around the $7950-$8000 region and headed back up to $8850, BUT I would not be confident in price breaching towards $9200 and above anymore.
Reason: Market structure has changed. Market trapped buyers to buy above $9000, and swiftly dumped lower. Support (green line) has also broken, and formed a lower low on the charts.
Same story as Bitcoin; Ethereum went as high as $288, and trapped the buyers who bought the breakout towards $300. This also created a “bull-trap” scenario. Thus, I would only be confident in buying Ethereum if price broke the resistance level cleanly. If not, I would look lower to buy back into Ethereum.
Ripple has tested resistance 3 times now, and since the 3rd test, price still rejected it and has moved lower. Back to our article Basic trading strategies for cryptocurrencies, note that resistance becomes weaker with each test. Thus, we can target the support as a good place to buy.
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