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JP Morgan: "Crypto Market is More Resilient Now"

26 May, 2021 Martin Petkov
Crypto Market is More Resilient Now

Hello and welcome, everyone. It's Martin here at CryptoGains. Today, let's put what's going on with the crypto market in some context. First of all, we're beginning with the analysis of this insightful article, which discusses the views of a JP Morgan analyst, who basically suggests that the market now is far more resilient compared to 2017 and 2018, comparing some of the corrections that we witnessed both in 2018 and that we're witnessing now.

And he goes on to say that we continue to see evidence of a resilient microstructure in the cryptocurrency market. The volatility spike appears somewhat regionally localised as opposed to the global changes that we witnessed in 2018. Market depth is down but has not cratered despite these moves, so there is still liquidity in the market, still opportunity to open and close positions without incurring significant losses or without the bid/ask widening quite substantially.

And also, he says the derivatives pricing has managed to adjust quickly enough to retain a decent fraction of the leveraged long base. So although a lot of leverage was wiped out in the market, there is still some present. Basically, he concludes against the view that we're in the midst of a self-reinforcing vicious cycle of price declines, which is a classic run scenario. He's arguing that this is not the case, and we're likely to witness a recovery of the market. In addition to that, famous crypto influencer Simon Dedic is saying that he tends to believe that this was just a massive bear trap, and Bitcoin to $100,000 and Ethereum to $9,000 is still possible.

Finally, some of the most significant developments today are around Polygon, with the ticker MATIC, and billionaire entrepreneur Mark Cuban has invested in it. And consequently, prices are jumping very strongly, with an overall 12,645% increase on a year-to-date basis. So let's move to the technical charts and see how you can trade some of these insights.

We're beginning with Bitcoin versus Tether. The critical level is $39,900. Above that level, opportunities to buy Bitcoin, with targets at $41,700 and then $45,800, which is the longer-term resistance area. Conversely, below $39,900, we could see declines, so you can sell Bitcoin below that level, with targets at $38,200 and $36,000.

And now, let's take a look at Ethereum. To me, Ethereum is well supported at $2,840. So, this is why I'm using its pivot point to initiate long positions, with targets at $2,950 and $3,200, which are the nearest resistance areas on the upside. Conversely, below $2,840, we could see more of a downtrend, with prices retesting what used to be a resistance area, which now is going to be support, more than likely, $2,730 and then $2,500 further down.

And now, let's move to Ripple. Ripple demonstrated extreme volatility over the last few trading days. We can see prices declining from $1.70 all the way down to $0.70, which is extremely significant but has recovered since. $1.04 is the critical pivot point. If we were able to break above that level, there would be a good opportunity to initiate long positions, with targets at $1.14 and then $1.25. Conversely, however, below $1.04, I see the bears prevailing, taking prices down to the levels of $0.96 and $0.87 on the short side.

And now, let's take a look at Chainlink. After reaching the top around $50, it declined all the way down to $16 but now is beginning to recover. So, currently, we're witnessing a good opportunity to initiate long positions if we're able to clear that critical resistance at $32. Above $32 is a good opportunity to initiate a long position, with targets at $36, then, subsequently, $40. However, below $32, the downside pressure may take us down on the short side to the nearest support at $28.70 and then, subsequently, even further down to $26.

And finally, let's take a look at Polygon. As discussed in the article, Polygon jumped quite substantially on the news that Mark Cuban is going to support it and is investing money into it. So, $2.18 is a critical level and, above that, a good opportunity for us to initiate long positions, with targets at $2.40 and $2.60, which is near the all-time high. Conversely, if some of that hype subsides, we may see downward pressure taking prices below $2.18 on the short side to $1.95 and $1.60.

These are all the ideas for today. Remember to join the crypto webinar that I'm hosting this Thursday. It's arguably one of the most anticipated crypto events of the year. We have over 16,000 people registered so far, so make sure you register. It will be in the description of this video. And of course, remember to join our Crypto Signals Made Easy channel, where I'm sharing lots of insightful articles. Keep learning with the video education section and the CryptoGains Market Insights subsection. Trade wisely, and I'll see you soon.

Bye-bye.

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