Cryptocurrency Market Analysis and Forecast for April-May 2019

Tech Analysis

This month’s bullish engulfing drives the major cryptocurrency pairs to new highs:

  • BTC briefly peaks at $5,600 towards month-end
  • ETH touches a high of $180 near month-start
  • LTC reaches $93 twice in succession between 4-6 April

April has seen cryptocurrencies achieve new highs last seen in the back-end of 2018. A bullish engulfing across most of the major pairs saw their prices rally as new support and resistance levels were defined throughout the month.

Bitcoin (BTC/USD)

Bitcoin (BTC) started the month with a bullish engulfing that rallied its price well in excess of $5,000. The rally occurred on 2 April with a golden-cross moving average (MA) formation that saw the seven-day average (7-day MA) act as support for the northbound rally (see chart label BA).

Shortly after the engulfing, the price continued to steeply rise in an ascending channel that saw it reach $5,400 on 10 April (see chart label BB). This was quickly followed by a three black crows candlestick formation that pulled the price back mid-month before the bulls managed to hold it at $5,000. This defined the new support level, which largely characterised the pair for the remainder of April.
BTC entered consolidation during the following days from 12-16 April, with support levels defined at $5,000 and resistance levels at $5,100. This range-bound behaviour mid-month was successfully breached northwards on 16 April (see chart label BC), when the price rallied again to achieve a new monthly – and yearly – high of $5,600 by 24 April.

By month-end, a bearish engulfing finally pulled the price south once more, where it managed to find support at $5,100 (see chart label BD) for April-close.

BTC/USD forecast

Looking at the relative strength index (RSI), which was placed between 40 and 60 during April, an apparent lack of momentum is portrayed in the market. This is further supported by the enmeshed MAs. Therefore, it is anticipated that support levels will be defined at $5,200 moving forwards.Entering May, a short-term bullish trend is expected with new resistance levels defined at around $5,350.

Ethereum (ETH/USD)

Ethereum (ETH) started the month at $140 (see chart label EA). This was then followed by a golden cross formation that saw the price rally to a high of $175 (see chart label EB) by 3 April. The 7-day MA acted as support for the rapid price rally and the RSI entered overbought, rising to over the 70 mark.

On 4 April the price was pulled back by a bearish engulfing that brought it back down to $150 (see chart label EC). The bulls then quickly managed to pull the pair back up again to achieve a new high of $180 on 8 April: currently the pair’s 2019 high-point so far.

The new high was sustained until 10 April, when a death-cross formation rapidly pulled the price down to $160 (see chart label ED) by 11 April. The following days saw the price consolidate before the bulls breached the sideways market to achieve a new price of $175 by 20 April. Support levels were then defined at $170. However, this was short-lived; in the coming days, from 23-26 April, the bears pulled the price back down to $150.

Currently, support levels seem to be defined at $150 (see chart label EE).

ETH/USD Forecast

The RSI is at 60; however, it seems to be pointed upwards. This suggests that a rally can be expected in the near-future. Short-term support levels can be placed between $150 and $155, with resistance at $165.

Litecoin (LTC/USD)

Litecoin (LTC) started the month trading at $59 (see chart label A) before a bullish engulfing brought it to a new high for 2019 of $93. The RSI during this period was over 70, indicating that the cryptoasset had entered the oversold region.

The early April period saw support levels defined at $85 (see chart label B). The initial monthly high was short-lived, however, as a bearish engulfing brought the price back down once again to a low of $71 (see chart label C) by 12 April. However, the bulls pushed the price back up shortly after, with new support levels defined at $75 and resistance levels in the region of $80 to $82.

LTC entered consolidation mid-month, until 24 April when this range-bound behaviour was breached to the southwards. Then, the price took a descending channel down to a low of $65 (see chart label D) by 29 April. Once again, the bulls managed to quickly bounce the price back up and close-off April trading at slightly over $70.

LTC/USD Forecast

Currently, the RSI is between 40 and 60, seemingly signalling a lack of momentum in the market. The MAs – both the 7-day and 21-day – are also intertwined. It is therefore expected that in the short-term, support levels will be defined at $70 with resistance levels at around $75.

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