AAVE Surges 24% in Explosive Rally, Breaking Key Resistance Levels

This is a daily technical analysis by our analyst and Chartered Market Technician here at The Parrot Press. In markets, finding the best entry point is crucial, as timing and levels can greatly impact the success of traders by influencing risk-reward ratios in their favor.

Bitcoin’s near-term outlook may seem positive with increased demand for bullish bets in the options market. However, the cryptocurrency is currently close to key resistance levels that have limited upside potential in recent months, making the risk-reward profile less appealing for those looking to take advantage of bullish prospects.

BTC has been testing the lower boundary of the “Ichimoku cloud” around $85K since Saturday. Developed by a Japanese journalist in the 1960s, the Ichimoku cloud is a technical analysis tool that provides a comprehensive view of market momentum, support, and resistance levels.

The indicator consists of five lines: Leading Span A, Leading Span B, Conversion Line or Tenkan-Sen (T), Base Line or Kijun-Sen (K), and a lagging closing price line. The space between Leading Span A and B forms the Ichimoku Cloud, with its upper and lower boundaries acting as potential support and resistance levels based on the price’s position relative to the cloud.

Back in early February, BTC dropped below $100K and traded below the Ichimoku Cloud. Since then, the lower boundary of the cloud has acted as a strong resistance level, limiting any recovery attempts.

With BTC now approaching this level again, bulls, especially those considering new bids, should proceed with caution. The immediate upside may be constrained by cloud resistance around $85K, while support is around $75K, approximately $10K lower than the current market rate. This situation presents an unfavorable risk-reward scenario for long positions.

The rejection at the Ichimoku Cloud on April 2 led to a significant sell-off, pushing BTC below $75K, similar to a pattern seen after the rejection on February 21. Therefore, the recent encounter with cloud resistance calls for close observation as it may lead to further selling pressure. A downturn from this level could bring attention back to the $75K level.

On the other hand, a potential break above $90K, signifying a breakout above the cloud, would indicate a continuation of the broader bull trend and a potential rally to new all-time highs.

Backpack, a crypto trading firm, recently acquired the European division of FTX, which had gone bankrupt. Now, Backpack has initiated the process for customers to claim their funds from the acquisition. Customers were directed to complete the first step of know-your-customer (KYC) verification in a post on X on Tuesday. The next step involves the distribution of funds, although the exact timeline for this is currently uncertain. According to Backpack’s FAQ page, this distribution is expected to happen at a later date.

However, the acquisition of FTX EU by Backpack was met with criticism from the bankruptcy estate of the larger FTX entity. The FTX estate stated that Backpack was not part of the U.S. bankruptcy court-approved process for returning funds and did not have authorization to make any distributions to customers.

FTX has managed to gather $11.4 billion in cash to be distributed to those affected by its collapse in 2022, with payments scheduled to begin at the end of May.

Morgan Stanley is in the works to introduce cryptocurrency trading on its E*Trade platform, marking a significant step by a major U.S. bank to give retail users direct access to cryptocurrencies. The initiative, which is still in its early stages, is anticipated to launch next year. According to Bloomberg’s report, the bank is considering partnering with crypto-native firms to assist in building the infrastructure for spot trading.

This move shows a significant expansion of Morgan Stanley’s cryptocurrency offerings, which currently include exchange-traded funds (ETFs), options, and futures contracts tailored to wealthier clients. Discussions within the bank reportedly intensified after regulatory rollbacks in the crypto space following Donald Trump’s return to the White House last year.

The introduction of cryptocurrency trading on E*Trade by Morgan Stanley could increase competition for crypto-native exchanges like Coinbase and Kraken. Other financial institutions are also exploring similar paths, with Charles Schwab expressing interest in adding spot trading. Additionally, SoFi is contemplating a significant push into the cryptocurrency space after observing a “fundamental shift” in the landscape in the U.S.