Above: Bitcoin (BTC/USD) Weekly Chart
Quick note on the month of May. There’s an ld stock market maxim: “Sell in May and stay away.” Risk-off assets typically face a lot of pressure in May and either sell-off or experience a lot of choppiness. The chart above is full price history of Bitcoin (weekly chart). Bitcoin does one three things in May, historically:
1.Sell off in the first week of May.
2.Sell off at the end of May.
3.Consolidates throughout May.
May can be bullish – but the end results, historically, are falling prices. Be aware of this as we move into May.
Above: Bitcoin (BTC/USD)
Bitcoin’s daily chart is at a make or break point. Saturday’s current daily high was halted against the 88.6% Fibonacci Retracement, which is a very nasty Fibonacci level that generally slaps price away from it. The Ichimoku system is displaying bullish conditions – but the Lagging Span might be tricking bulls here. Watch out for the Lagging Span to drop below the candlesticks, especially if it dips below 55,260. Bearish divergence exists between the RSI and Composite Index as well. If Bitcoin does get rejected here, then broader ABC corrective wave could likely terminate all the way down to 36,935 (161.8% Fibonacci Extension). Watch for a fast trip to this zone if both price and the Lagging Span trade below the Kumo. Speaking of the Kumo: there could be some strong support here for Bitcoin if it does move lower. Senkou Span B is strong support at 52409 and, if the Lagging Span moves lower (could trap bears) the we could see the Lagging Span find support at 44,000. Very touchy zone here for Bitcoin.
Above: Cardano (ADA/USD) Weekly Chart
If you haven’t watched my Cardano video for the weekend, please go watch. I discuss the extremely bullish setup on the Point & Figure chart where our profit target is at $2.40. Given the bullish setup on the weekly Ichimoku chart and the Point & Figure chart, May could be a massively bullish one for Cardano – followed by a massive crash if we assume Cardano would follow the rest of the market lower. Four weeks of insane pushes higher, would probably mean a swift reversal back to our current value area.
In the interim, the trade idea I suggested in my video is the best one I have right now. The buy stop at 1.60 would confirm a major entry on the Point & Figure chart by fulfilling a bearish fakeout as well as a bullish catapult. The combination of those two patterns is more than sufficient to see Cardano launch up towards the 2.40 value area.
Above: Ethereum (ETH/USD) Weekly Chart
Ethereum has made some nice run ups over the last week – but we should be looking for a top coming in soon. The 3300 – 3400 value area is a likely stopping point for Ethereum in the near term. Multiple Fibonacci Extensions from the weekly swings point to a confluence of Fibonacci levels around the 3300 to 3400 value area. Additionally, observe the bearish divergence between the RSI and the Composite Index on the weekly chart – a big warning sign that a bearish move could be imminent. Additionally, next week begins the seventh week in the current leg up for Ethereum and that falls within Gann’s 49-day death cycle, providing further warning against any further upside potential. If Ethereum does reach the 3300-3400 value area, I’d be looking to short it to around 2200 or look at the 2200 value area a zone to place some limit buy orders.