Healthy Bitcoin and Ethereum Pullbacks To Their 10-day Moving Averages
In last week’s report, we showed why the Bitcoin breakout above key resistance at the 42,000 area would lead to a significant change of overall market sentiment.
When the crypto markets were in “correction mode” from April through July, traders were aggressively selling into the strength of every bounce in the market. But with the bulls back in control, traders have switched to buying the pullbacks to near-term support levels.
In the August 9 issue of Morpheus Crypto Report, we wrote,
“Given the bullish price action in Bitcoin and Ethereum, pullbacks to short-term support levels such as the 10 and 20-day moving averages may now provide ideal buy entry points for swing trades.”
As anticipated, both BTC and ETH neatly retraced down to their 10-day moving averages, creating low-risk pullback buying opportunities.
On August 13, we alerted Morpheus Crypto Chat readers that both Bitcoin and Ethereum were pulling back to support of their 10-day moving averages. Several hours later, BTC and ETH rallied sharply after successfully testing that important technical indicator of short-term trend and momentum:
Leading altcoins continued showing relative strength, enabling us to score solid gains from several swing trades last week. After a substantial market correction, new leadership typically emerges in the altcoin market.
While some of the same altcoins of the previous bull market may again rise to the top, new market cycles are often fueled by a different mix of leading crypto assets.
4 Leading Crypto Altcoins With Top Relative Strength
As technical traders, we use relative strength to scan for altcoins that are poised for breakouts to new all-time highs—even while Bitcoin and Ethereum are still well below their respective highs.
The first altcoins to explode to fresh all-time highs while the overall market is still recovering frequently become the new leading cryptos in the next bull market.
As such, we have been tirelessly scanning for the strongest crypto altcoins that have already rallied all the way back to (or near) their previous all-time highs.
Below are a few annotated charts of altcoins currently leading the market:
1. Quant
Top leadership and massive relative strength.
Showing early and massive relative strength, Quant (QNT) was one of the only cryptocurrencies that rallied to a new high while Bitcoin had only started bouncing off its low three weeks ago. Since then, QNT has been consolidating in a tight, sideways range on lighter volume.
With the 10 and 20-day moving averages now converging to provide support, be on the lookout for a potential move in QNT soon.
2. Solana
Breaking out to a new all-time high, Solana (SOL) blasted through resistance to a new all-time high today, while Bitcoin is still nearly 30% off its high:
3. Terra
Potential breakout to a fresh all-time high. Like SOL, Terra (LUNA) has been showing impressive relative strength and is now testing resistance of its all-time high:
4. Cardano
Breakout to a new all-time high. Cardano (ADA), currently the fourth largest cryptocurrency by market cap, blasted higher last week and is now within striking distance of new highs.
We also scored a total gain of more than 40% with two separate swing trades in the Model Crypto Portfolio (included with Morpheus Crypto PRO service).
The recent rallies in leading altcoins have been impressive, but please don’t chase big moves due to fear of missing out (FOMO). Instead, be patient and start building your relative strength watchlist of emerging altcoin leadership. Then, look for valid pullbacks or consolidation patterns that provide you with a positive risk/reward ratio for potential buy entry.