Bitcoin’s rally continues to attract traditional investors. Will their entry propel the price to new highs? Let’s study the charts.
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Market data is provided by the HitBTC exchange.
The bitcoin price surged more than $435 in a matter of 10 minutes early Monday morning (UTC time), likely due to short sellers covering their positions. The resilience of the leading digital currency and the sharp recovery in prices has forced Mark Mobius, founder of Mobius Capital Partners LLP, to change his earlier negative view on bitcoin. Though he does not own bitcoin, he said that if it continued to grow, he might have to add it to his portfolio.
Deutsche Bank has announced that it will shut down its equities sales and trading business and also cut back its fixed income business. This will lead to 18,000 job cuts. Analysts have pointed out that one of the reasons for this move is the ultra-loose monetary policy adopted by the central banks. However, money printing will benefit cryptocurrencies and bitcoin in particular as it has a fixed supply that cannot be altered. What do major cryptocurrency charts project? Let’s analyze the charts and find out.
Bitcoin (BTC) has rebounded off the 20-day EMA and the bulls are currently attempting to scale above the $12,000–$12,500 resistance zone. A breakout of this zone can retest the recent highs of $13,973.50. We anticipate stiff resistance at this level but if the momentum can break through it, short sellers will be forced to throw in the towel, which can propel the price to $16,249.42. Above this, a retest of the lifetime highs will be in the cards.
Both moving averages are sloping up and the RSI is in positive territory. This suggests that the bulls still hold the advantage in the short term.
However, if bears defend the overhead resistance zone, the BTC/USD pair might again dip back to 20-day EMA. A break of this support can drag the price to the 50-day SMA. We anticipate this support to hold and it can act as a good entry point for the traders.
We suggest traders wait for the price to rebound off the supports before buying, because if 50-day SMA fails to hold, traders will be forced to liquidate their long positions. Nonetheless, with the bear market having ended, traders should view dips as a buying opportunity.
Ether (ETH) has bounced back above the 20-day EMA, which is a positive sign. We like the way bulls have managed to keep the price above the 50-day SMA during this pullback. It shows that buyers are not waiting for a deeper correction to enter long positions.
The bulls might face resistance at $320.840 and above it at $366. However, if the price breaks out and closes (UTC time frame) above $320.840, we suggest traders buy 40% of the desired position size. A stop loss for the trade can be kept at $270. Remaining positions can be added on a breakout above $366.
We are recommending long positions on a breakout above $320.840 because the ETH/USD pair will complete a rounding bottom pattern that has a target objective of $557.43. There is stiff resistance close to $500, hence, we will keep it as our initial target. Our bullish view will be invalidated if the pair reverses direction from the overhead resistance and slumps below $270.
Ripple (XRP) has held the first support of $0.37835. However, the subsequent bounce off the support could not break out of 20-day EMA on July 6. This shows selling at higher levels. The moving averages have completed a bearish crossover and the RSI is in the negative zone. This suggests that bears have the upper hand.
Currently, bulls are again attempting to push the price above the moving averages. If successful, the XRP/USD pair can move up to $0.45. However, if the bulls fail to propel the price above the moving averages, bears will try to sink the pair below $0.37835. If this support gives way, the next support is $0.35660. As the cryptocurrency has not participated in the recent recovery, we will wait for it to pick up momentum before suggesting a trade in it.
Litecoin (LTC) has been trading in a tight range for the past three days. The bulls are attempting to keep the price above the 50-day SMA. If this support breaks down, the pullback can extend to $111.8994. This is a critical support, below which, the fall can extend to the support line of the ascending channel.
Both the moving averages are flattening out and the RSI is just below 50, which suggests a consolidation in the short term. We will wait for the price to bounce strongly either from $111.8994 or from the support line of the channel before recommending a trade.
Contrary to our assumption, if the bulls ascend the moving averages, a rally to $140.3450 is likely. The LTC/USD pair will pick up momentum on a breakout and close above $146.
Though Bitcoin cash (BCH) has traded below the 20-day EMA for the past seven days, bears have not been able to take advantage of the weakness and sink the price to the support line of the channel. This shows a lack of sellers at lower levels.
We now expect bulls to attempt to push the price above the moving averages. If successful, a move to $448 and above it to $515 is possible. Hence, short-term traders can buy on a close (UTC time frame) above $423 and keep the stop loss at $375, which is below the recent lows. A breakdown below $375 will invalidate our bullish view, as it can result in a drop to $280.
Though bulls have held the support at $5.550, they have failed to propel EOS above 20-day EMA and into the channel. If the cryptocurrency re-enters the channel, it will be a bullish sign. We might suggest long positions if the price sustains inside the channel for a couple of days. The bulls might face resistance at the downtrend line, but once it is scaled, it can move to $7.6435 and above it to $8.60.
Conversely, if the price reverses direction from the current levels or from the 20-day EMA and breaks below $5.550, it can correct to $4.4930. With the 20-day EMA sloping down and RSI in the negative zone, the path of least resistance is to the downside.
After staying below the 20-day EMA for the past seven days, Binance Coin (BNB) is attempting to rise above it. If bulls can sustain the price above $34.50, it is likely to move up to $40 once again. A breakout and close (UTC time frame) above $40 will resume the uptrend.
Conversely, if bulls fail to sustain the price above $34.50, bears will again try to sink it to $28.7168. The zone between the uptrend line and $28.7168 is likely to offer strong support. Hence, we might suggest long positions closer to the uptrend line because the long-term trend remains bullish. Our positive view will be negated if the BNB/USD pair breaks down and sustains below the uptrend line. If that happens, the slide can extend to $18.
Bitcoin SV (BSV) has been struggling to move above 20-day EMA for the past five days, which is a negative sign. It shows a lack of demand at higher levels. The 20-day EMA is sloping down marginally and the RSI is just below 50, which suggests rangе-bound action in the short term.
The support of the range is at $172.910 while resistance is at $226 and above it at $255.620. After such a sharp move, a consolidation is a positive sign. If the consolidation resolves to the upside, the BSV/USD pair will pick up momentum and resume its uptrend. On the other hand, if bears sink the price below $172.910, a fall to $134.360 is possible. We are currently neutral on the pair.
We have been waiting to buy Tron (TRX) close to the trendline of the ascending channel as it reduces the risk. However, on July 7, the bulls propelled the price higher, breaking out of both the moving averages. The price is facing a stiff resistance close to $0.036. If this level is scaled, the next level to watch on the upside is $0.040.
However, if bulls fail to push the TRX/USD pair above $0.036, a fall to $0.030 is likely. If this support also cracks, the decline can extend to the support line of the channel. Both moving averages are flattening out and the RSI is close to the midpoint. This points to a consolidation in the near term. We do not find any buy setups at the current levels.
Cardano (ADA) is range-bound between $0.073 and $0.10. The bulls have held the first support at $0.077 and are attempting a pullback. If the price breaks out of the moving averages, it can move up to $0.10, which is a critical resistance. The cryptocurrency will pick up momentum on a breakout and close above $0.10.
On the other hand, if the ADA/USD pair turns down from the 20-day EMA, bears will again try to break below the $0.077–$0.073 support zone. If this zone cracks, the next support on the downside is at $0.060. However, if the support zone holds, the bulls will attempt to scale above the moving averages. We will watch the next dip towards $0.077 and then suggest long positions.
Market data is provided by the HitBTC exchange.