Technically Speaking – Jul 27, 2022

At the time of writing this section of the Litepaper (1431 EST), The Federal Reserve announced a rate hike of 75 basis points (expected), and Fed Chair Jerome Powell just started his press conference. 

The initial response in risk-on markets like stocks and cryptocurrencies has been to the upside – but as anyone with more than a year in this space knows, things can quickly turn around. So by the time you read this section of the Litepaper, things could be waaaaay different. 

In today’s Technically Speaking, we’re going to look at some critical price levels that analysts are watching. 

If you don’t want to read all the technical mambo jumbo, you can skip to the TL;DR (Too Long; Didn’t Read) for a quick summary.

Cosmos ($ATOM.X)

You may not be familiar with the chart style above, but it’s regarded as the first charting style used in technical analysis, predating even Japanese Candlesticks. The chart style is known as Point and Figure. 

Think of the green X columns as green candlesticks (price starts at the bottom and closes at the top) and the red O columns as red candlesticks (price starts at the top and closes at the bottom).

Point and Figure is a price action style chart – it records only price. There is no time factor. Soon, an introduction to this chart style (and others) will be available. But I don’t want to bore you to death, and you’re not here for a lesson, so I’ll get to the point. 

The black box around the last two Os highlights a necessary move to confirm a Point and Figure pattern known as a Bearish Fakeout – which is a form of a bear trap – which is bullish. 

Analysts see a bullish breakout if Cosmos ($ATOM.X) can reach the $10.50 level. From there, the expected price level buyers will likely face some slow down in buying pressure in the $16 value area. 

From a bearish perspective, analysts warn that a close at or below $8.50 could trigger another leg south. Support may not occur until the $5.50 to $6.00 levels. 

TL;DR 

Bullish analysts see a move to $16 if the $10.50 level is reached and holds as support.

Bearish analysts see a drop to as low as $5.50 if the $8.50 level fails as support.

FTX Token ($FTT.X)

Going back to a daily candlestick chart for FTX ($FTX.X). But to add to the confusion, I’ve added the Ichimoku Kinko Hyo system. The Ichimoku system is easily identified by the big blobs of red and green on the chart. 

I’m not going to get into the nuts and bolts here, but I want to point out that within the Ichimoku system, there is an entry strategy known as the Ideal Bullish Ichimoku Breakout. Without going into all criteria, understand that the conditions for an Ideal Bullish Ichimoku Breakout are very strict and don’t happen often. 

If the breakout is confirmed, Ichimoku analysts and traders believe that a sustained move higher has a high probability of occurring. 

Ready for another nerd word? Fibonacci Expansion. If FTX can close at or above $28.25, then a move towards the 100% Fibonacci Expansion at $34 has a high probability of occurring. 

Bearish considerations remain highly likely, especially given that the overall trend remains lower. If FTX experienced a daily close at or below $24.25, analysts anticipate that may trigger a swift move below the $20 value area. 

TL;DR 

Bullish analysts see a move to the $34 value area if a daily close is confirmed at or above $28.25. 

Bearish analysts see a drop towards the $20 level if $24.25 fails to hold as support.

More in   Crypto

View All

Technically Speaking – September 30, 2022

Polygon (MATIC)

No, the chart below is not a bunch of hugs and kisses. The chart style is known as Point & Figure, the oldest technical analysis chart style in existence. The primary difference between Point & Figure charts and Japanese candlesticks or American bar charts is Point and Figure is a price action only chart. There is no time or volume. 

Read It

Cardano Founder Hoskinson Slams Industry Bias

In a lengthy Twitter thread, Cardano’s ($ADA.X) founder and former Ethereum ($ETH.X) co-founder, Charles Hoskinson lambasted the crypto media industry and fanboy base as a whole. 

Hoskinson highlighted the media’s negative focus on Cardano’s three-month delay of the Vasil hard fork, yet gave a pass to Ethereum’s three-year delay of the Merge. He also lamented the ‘us vs. them’ mentality and that it does more to hurt the industry than help. 

Read It

What The Merge Does And Doesn’t Do

It’s an exciting time for the cryptocurrency space – Ethereum’s ($ETH.X) The Merge! It’s right around the corner, but some confusion remains about what The Merge will and won’t do. We’re going to highlight some of those today. 

What is Proof-of-Stake?

Read It