U.S. stock markets have been grinding to new all-time highs, but that doesn’t mean there hasn’t been volatility. We’ve seen bear markets envelope growth stocks and cryptocurrencies. While many stocks in the former have recovered, the latter has been left limping. That’s got investors looking to the best crypto charts in the space.
It hasn’t been easy to find them and in many cases, we’ve had to take the good with the bad. In other words, assets suffering through a bear market often have plenty of issues when it comes to the technicals. Most are below key moving averages and support levels. They also tend to be in downtrends or some other sort of negative technical situation.
That’s the way it is. However, there are a handful of cryptos that have found their footing and have reclaimed some form of key support. With many of these down more than 60% from the highs, consider this an opportunity. Specifically, we’re either looking for more downside to buy a big dip or a “prove-it” rally where a rotation gives us confirmation in the strength.
Let’s look at the seven best crypto charts we could find.
- Bitcoin (CCC:BTC-USD)
- Ethereum (CCC:ETH-USD)
- Dogecoin (CCC:DOGE-USD)
- Ripple (CCC:XRP-USD)
- Polkadot (CCC:DOT-USD)
- Bitcoin Cash (CCC:BCH-USD)
- Coinbase (NASDAQ:COIN)
Best Crypto Charts: Bitcoin (BTC-USD)
Bitcoin is the obvious leader of the bunch, but that’s not always from a price-action perspective. However, Bitcoin is the leader from a market cap perspective. Despite the current decline from the Q2 high, it still commands a $625 billion market capitalization.
That’s more than twice the next largest cryptocurrency, Ethereum.
When Bitcoin topped out in April, a number of other cryptos continued to rally. In some instances, these names exploded higher. So while Bitcoin is a leader, it’s not the only one to watch.
As for the charts, it continues to bounce off the $30,000 to $31,000 area. However, Bitcoin continues to struggle when it comes to gaining upside momentum. Until $30,000 and the 50-week moving averages fail as support, we have to keep this level in mind.
On the upside, I want to see Bitcoin get above — and more importantly, stay above — the 10-day and 21-day moving averages. If it can, it puts the 50-day moving average in play.
A break of the recent low at $28,600 could trigger more downside selling pressure. While painful, that will inevitably set up a better buying opportunity in the future.
Ethereum is the next largest cryptocurrency by market cap. Because of the issues that China is having with Bitcoin, more people are turning to Ethereum to gain exposure to the crypto market. Plus, Ethereum not only did well after Bitcoin topped, but it led the charge for other cryptos to rally higher.
Unfortunately though, it has not been able to sidestep the widespread pain in cryptocurrencies. From peak to trough, it’s now seen a decline of about 50%. However, it is still up about 200% for the year. So there are pros and cons.
Like Bitcoin, Ethereum continues to hold a key area on the downside. In the latter’s case, that comes into play around $1,950. The 200-day moving average also remains in play as support.
We’ve seen a few moves below this area, but on a closing basis, Ethereum continues to hold $1,950. From here, let’s see if Ethereum can find support from its short-term moving averages. On the upside, let’s see if shares can take out the 10-week moving average. Above it puts $2,500 and the 50-day moving average in play, followed by $2,900.
If support doesn’t hold up, we may see the $1,950 area retested. Below $1,950 puts the key $1,730 mark on the table, while a move below $1,730 could create a big flush lower into a new buy zone.
Best Crypto Charts: Dogecoin (DOGE-USD)
When one looks at a chart of Dogecoin, it doesn’t look all that good at first glance. Because of its large pullback from the highs, it may be easy to forget that Dogecoin is still up more than 3,500% in 2021 and up more than 200% in the last three months. From the start of April, Dogecoin is up about 250%.
So even though Dogecoin is down more than 60% from its highs, we need to keep in mind just how well it has done so far this year.
The other positive? Dogecoin continues to hold up in the 22 to 25 cent range. That zone has largely been support over the last few months, although in mid-June it did fail as Dogecoin dropped down toward the 200-day moving average.
This one is a bit mixed. It continues to put in a series of lower highs and its short-term moving averages, which isn’t working in its favor. In fact, they are acting as resistance. However, it has another catalyst in Tesla’s (NASDAQ:TSLA) Elon Musk.
Musk has been a huge supporter of Bitcoin and Dogecoin over the last few months and he’s the one who helped jump-start the first rally in Dogecoin.
If cryptocurrencies come back to life, this one could again see an enormous surge.
Ripple doesn’t get as much attention as the other cryptocurrencies out there. However, the charts actually look okay. Or should I say, look okay considering that the asset is down 65% from the highs.
To the right is a weekly chart. As Ripple came tumbling lower, it bounced off the 50-week moving average. Also notice the $60 level. That mark was resistance in Q4 and Q1 before a huge breakout in April.
While Ripple struggled to sustain over $1.50, the hope is that the 50-week moving average and the 60 cent level are close to a bottom. This one really falls apart should it lose the recent low and break the 200-week moving average.
Above the 200-week, and who knows. This one could generate a decent return.
Best Crypto Charts: Polkadot (DOT-USD)
Polkadot is a really interesting crypto. According to Forbes,“Polkadot was founded by the Web3 Foundation in Switzerland and is an open-sourced, decentralized web created by ex-Ethereum CTO Gavin Wood.”
Further, The company is “on track to deliver the most robust platform for security, scalability and innovation.”
Given the founder, this is one worth watching, even if it’s not on many investors’ radar and the market cap is still relatively small. On the plus side, it continues to hold the $12 to $14 range really well. That level has seen support all year, as it continues to provide bounces.
I also like the way Polkadot continues to trade sideways. That said, it’s struggling to reclaim the 10-day moving average. That doesn’t bode well for the crypto, as its short-term moving averages are still working against it.
That’s why I like Polkadot in certain scenarios. One is a push through the 21-day moving average. This “prove-it rotation” could open up a test of the $20 level and the 50-day moving average.
Should key support fail instead, I’m looking for a dip down to the $10 level, then perhaps the $7 level as deep-value dip-buying opportunities.
Bitcoin Cash (BCH-USD)
Like the rest of the group, Bitcoin Cash has seen a hefty blow from the highs. While it too is struggling with its short-term moving averages, it perhaps looks better than many of its peers.
If we can get a push over the 21-day moving average — which it’s tussling with as we speak — then a jump toward $600 is possible. There it finds the 10-week, 50-day and 200-day moving averages.
I would expect this zone to give the crypto some trouble. However, back above it and the $750 to $800 area is on the table.
On the downside, the $440 level and the 50-week moving average continue to act as support. A break of $400 could put $372 in play, but so far, that level continues to act as stiff support.
Best Crypto Charts: Coinbase (COIN)
Okay, so it’s not really a crypto, but Coinbase is the only pure-play equity investment that gives investors access to a broker in this space. There are ETFs that focus on crypto and some stocks of companies that invest heavily in the space, but this one has a very high correlation.
Coinbase has support in the low $200s and, after a solid breakout over downtrend resistance, it’s pulling back into its short-term moving averages. Bulls want to see these measures hold as support.
If they don’t, not all hope is lost — although the bull case is much easier if it happens. A break of the moving averages puts the $208 to $215 area in play, as well as the backside of prior downtrend resistance (blue line).
A move over $261.15 could put $300-plus in play very quickly. Over $300 and the 61.8% retracement comes into play near $345. On the downside, a break of $200 and worse, a close below it, could spell some trouble.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.