Elliott Wave: Cryptos in recovery mode
Cryptocurrencies are holding up pretty well, there’s actually no major changes since yesterday, but that’s good because what we see is some intraday consolidation that can take us even higher. We can see that even altcoins are doing pretty well now, trading well above the ending diagonal resistance line when looking at TOTAL 3, which was also retested as support near 790 billion. So apparently altcoins can also do well and can be headed towards 860 billion and even further later on, especially if the rise from April lows will unfold in five waves. So far that's not the case yet, but it looks promising.
In terms of uncertainty or when we have a risk-off environment, we can obviously expect that cryptocurrencies will make a sharper retracement because they are much riskier assets than stocks and much more volatile. So typically, in a risk-off environment, when both Bitcoin and the stock market are trading to the downside, Bitcoin tends to lose much more value. But whenever there is a risk-on environment, Bitcoin can do well, especially when investors show confidence that the market has bottomed. So far, we can see that Bitcoin is doing pretty well now while the S&P 500 has bottomed around 5000. The Bitcoin-stock market ratio is pointing higher into wave five, so it looks like this current risk-on sentiment can resume and investors may have much more interest in cryptocurrencies in the near future while stocks are trading above the April lows.
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Author
Gregor Horvat
Wavetraders
Experience Grega is based in Slovenia and has been in the Forex market since 2003.
