Key Psychological Levels For The Big 4 Cryptocurrencies

Without a doubt, it has been a challenging 2018 for Bitcoin (BTC) and the rest of the cryptocurrencies. Heavy losses have been the norm, as traders wonder about the future of the industry as a whole. Nonetheless, the last 24 hours have been relatively calm. BTC and the other crypto leaders are hanging in there, trading very near flat.

Daily and Weekly Metrics

The performance metrics for the last 24 hours have been relatively stable. Volatility is limited and values are up or down modestly:

Coin                               Performance (Approximate)

Bitcoin (BTC)                              +0.5%

Bitcoin Cash (BCH)                     +0.1%

Ethereum (ETH)                          +1.7%

Litecoin (LTC)                              -1.1%

As these assets seek an area of fair value, trader psychology is playing a major role in pricing. This pattern is especially evident in ETH and LTC. ETH has traded in the vicinity of $400 for the last week and LTC between $125-$100. The tightening of daily trading ranges in the proximity of round numbers means one thing — a breakout is coming!

Short-term values are encouraging, but the pain of the last seven sessions is significant. Weekly losses are the rule, as early April has continued 2018’s downtrend:

Coin                               Performance (Approximate)

Bitcoin (BTC)                                -9.0%

Bitcoin Cash (BCH)                     -10.0%

Ethereum (ETH)                           -4.0%

Litecoin (LTC)                              -16.0%

Overview

I have talked about the significance of the coming U.S. tax deadline to crypto values several times during the past month. 2017 was a banner year for the industry and the Internal Revenue Service (IRS) is on record stating that they intend to aggressively enforce existing tax laws. This has led to investor paranoia and a sustained selloff of the entire sector.

Ultimately, each cryptocurrency is going to have to establish a bottom before posting any sort of rebound. In my opinion, round numbers are going to play an instrumental role in this process. Here are the key numbers that may serve as intermediate-term bottoms:

Coin                               Key Psychological Level

Bitcoin (BTC)                               $5000

Bitcoin Cash (BCH)                      $500

Ethereum (ETH)                           $400

Litecoin (LTC)                               $100

It is an elementary analysis, but sometimes simple is better. BTC is the key benchmark of this asset class. I will be surprised if recent weakness is not punctuated by a test of $5000. If this comes to pass by tax time, we may be in a position to buy in for the long-term.