Above: Bitcoin (BTCUSD) Daily Chart
We’ve talked a lot about how the Ichimoku Kinko Hyo system has warned of some inevitable short pressure for Bitcoin. Ever since the Lagging Span dropped below the Cloud and close below the Cloud on Sunday, we’ve seen some intense selling pressure into the Monday trade session. Last week, we identified some regular bullish divergence – a condition that can mostly be ignored when an uptrend already exists. Instead, we want to find hidden bullish divergence – and Bitcoin just printed that same condition on its daily chart. If you look at the blue trendline on the candlestick chart, you’ll see that Bitcoin has created a new swing low. But on the Composite Index (#1), it established a higher low – that’s regular bullish divergence. The RSI has a higher low – that is the hidden divergence to take note of. How likely are we to see a bounce here? I’m cautious. The volume profile shows traders have pushed Bitcoin below a high-volume node, and we’re currently at a level where it could flash crash to the 35k – 38k value areas. The 161.8 Fibonacci Extension at 35,407 is also the next high-volume node, so watch for that level to hold as a new major support zone.
Above: Cardano (ADAUSD) Daily Chart
Cardano’s had one hell of a run over the past four days, roughly +60% from last Thursday’s (May 13th, 2021) open. The most recent all-time high was hit on Sunday (May 16th, 2021), and bulls were halted from moving higher at 2.51. Fast forward to the Monday trade session, and sellers pushed Cardano as much -17% to sub 2.00 (1.90), but ultimately it closed -11.72% at 1.90. A 50% retracement from the all-time high will put Cardano right in the prior congestion zone: 1.25 – 1.30. That is where I think we’d see the significant lows found for a bit, but the near-term support level should be the Kijun-Sen at 1.71. 1.71 is a -30% drop from the all-time high, and Cardano experiences those types of moves quite often, so I’m inclined to look for the 1.71 level as a good entry for me.
Binance Coin (BNBUSD)
Above: Binance Coin (BNBUSD) Daily Chart
Binance Coin continues to face strong selling pressure ever since its run-up was halted at the beginning of May. The 700 level has acted as strong resistance, and the past five trading days have seen bulls make attempts to push BNB higher, but instead, we see it moving further south. Some of the drawings on the chart may look familiar – they’re the same drawings for analysis I’ve done on BNB in April. The long, green horizontal band on the chart represents the most substantial near-term support – at present, this represents Senkou Span A in the Ichimoku Kinko Hyo system. The critical level to watch here is a break of 435.48. 435.48 is the 50% Fibonacci Retracement of the all-time high to the strong bar of the current expansion move. If BNB closes below 435.48, that also means the Lagging Span has dropped below the candlesticks. When the Lagging Span drops below the candlesticks, it sends a strong signal that a deep corrective move is likely. For any strong selling to occur, price ultimately needs to close below the Cloud at 405. I see for BNB the next support level at the 261.8% Fibonacci Extension at 277.77, which is also the Point Of Control on the Volume Profile.