Bitcoin’s (BTC) month-long consolidation between $50,000 and $60,000 reflects a tug of war between buyers and sellers. But from a long-term perspective, the uptrend remains intact.
That’s important to consider as some cryptocurrency traders get caught up in short-term volatility, according to Katie Stockton, technical analyst at Fairlead Strategies.
- “The breakouts that we’ve already seen in bitcoin have already been exceeded,” said Stockton during an interview on CoinDesk TV’s “First Mover.” She prefers to see a decisive breakout from the current consolidation phase in order to derive an upside target.
- Despite the pickup in short-term volatility, Stockton determined that intraday declines of about 3%-6% are less impactful on the chart. This suggests ongoing support from trend and momentum indicators.
- As BTC consolidates, traders could look to altcoins for upside potential. “The rotation out of bitcoin is certainly happening to the benefit of these other cryptos.”
- Stockton uses a relative rotation graph (RRG) to measure five-day trend and momentum of altcoins versus BTC.
- EOS has outperformed BTC over the past five days, while ether (ETH) has shifted from the improving quadrant to the leading quadrant over the same time period. However, Stockton mentioned, a pullback below $1,974 in ETH could register a failed breakout, giving way to a deeper pullback or additional consolidation.
Despite short-term volatility, bitcoin’s uptrend remains intact. And some traders could be shifting to altcoins.