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Market data is provided by the HitBTC exchange.
Intercontinental Exchange Inc (ICE) has been loading up on digital assets for its cryptocurrency platform Bakkt, according to its chief executive officer Jeffrey Sprecher. This has helped ICE buy assets at a discount, which would not have happened if the markets were in a bull phase. Sprecher expects Bakkt to start operations later in 2019.
Attention has been shifting to institutional investors since the bear phase started. Stronger hands with deeper pockets are needed to provide stability in crypto markets. In a survey of 411 United States institutional investors, Fidelity Investments found that 47% of the participants believe that digital assets have a place in their investment portfolios.
The major attraction is the low correlation with other asset classes. Converesly, unclear regulation, lack of fundamentals, volatility, etc, were some of the hurdles in investing in digital assets.
Along with institutional involvement, mass adoption of cryptocurrencies is another important activity that can boost prices. In this regard, the markets are watching the development of Facebook’s rumored “FB Coin.” Sources have said the Wall Street Journal that Facebook is looking to raise $1 billion in investments for its cryptocurrency stablecoin. With Facebook’s mass reach, it can bring cryptocurrencies to the mainstream at a faster pace.
The recent recovery in Bitcoin has gathered pace and has pushed its market capitalization above $100 billion. Altcoins have also benefited from the bullish sentiment. After the rally, is it a good time to buy or to book profits? Let’s find out.
Bitcoin (BTC) has surged towards its overhead resistance of $5,900. We like the pickup in momentum. This suggests confidence among the bulls that the leading digital currency will extend its recovery. If the price scales above $5,900, it will be a major sentiment booster. There is a minor psychological resistance at $6,000 but we expect it to be crossed. The next level to watch is $6,480.54. We expect the zone between $6,000–$6,480.54 to offer a stiff resistance. Hence, the traders can tighten their stops to protect their paper profits.
Contrary to our bullish view, if the BTC/USD pair fails to sustain above $5,900, it can witness profit booking that can drag it to the 20-day EMA. The pair might also enter into a consolidation between $4,914.11 and $5,900 for a few days. The trend will turn negative on a breakdown of $4,914.11. Until then, the bulls will continue to buy the dips. Traders can trail the stops on the remaining long positions to $5,400.
Currently, both the moving averages are sloping up and the RSI is also trying to break out of the negative divergence. This is a bullish sign. It shows that the path of least resistance is to the upside.
Ethereum (ETH) has broken out of the downtrend line. It is currently facing resistance at the $180–$190.54 zone. If the bulls scale this zone, the digital currency can rally to $225 and above it to $256. Traders can buy above $192 and keep an initial stop loss of $146. As the risk to reward ratio is not very attractive, the position size can be about 40% of usual. We will suggest to trail the stops higher at the first available opportunity.
Our bullish view will be invalidated if the ETH/USD pair fails to ascend the overhead resistance zone and breaks below $148. Currently, the 20-day EMA is starting to turn up and the RSI has risen into positive territory. This suggests that the bulls have a minor advantage in the short term. The next couple of days are critical as it will set the stage for the next leg of the sustained move.
While most major cryptocurrencies are on fire, Ripple (XRP) continues to lag behind. It is still trading below the 20-day EMA and close to the lower end of the range. This suggests a lack of interest among the bulls.
The XRP/USD pair needs to break out of the moving averages and $0.33108 to signal some buying. If the follow up buying pushes the price above $0.37835, we expect the pair to pick up momentum.
On the other hand, if the digital currency fails to move up, the bears will again try to break down of the critical support at $0.27795. We will wait for the breakout above $0.33108 to sustain before suggesting a long position.
Bitcoin Cash (BCH) has broken out of the downtrend line, which is a positive sign. The 20-day EMA is gradually turning up and the RSI has risen into positive territory. This shows that the bulls have the upper hand.
The BCH/USD pair can now move up to $335.62 and above it to $363.30. We expect this level to act as a stiff resistance. If the price turns down from one of these resistance levels, the pair will trade in a range for a few days.
Our bullish view will be invalidated if the digital currency fails to sustain above the downtrend line and slips back to $255. The trend will turn negative on a breakdown of $225.
Litecoin (LTC) has broken out of the 20-day EMA, which is a positive sign. It can now rally to $84.3439 and above it to $91. The digital currency has formed a cup and handle formation that will complete on a breakout and close (UTC time frame) above $91. This pattern has a target objective of $158.91. Traders can wait for the price to close above $91 to attempt this trade. The stop loss for this trade can be kept at $66 initially, which can be raised later.
But if the LTC/USD pair fails to climb the overhead resistances, it might remain range bound for a few days. The 20-day EMA is flat and the RSI is just above the midpoint. This suggests range-bound trading action in the short term. The trend will turn bearish on a breakdown and close below the recent lows of $66.470. It is always better to wait for the pattern to complete to go long, instead of buying in anticipation.
EOS has broken out of the downtrend line and the 20-day EMA. This suggests that the recent pullback is over and it will now march toward $6.0726 and above it $6.8299. The 20-day EMA is gradually turning up and the RSI has jumped into positive territory. This shows that the bulls have the advantage in the short term.
Nonetheless, if the bulls fail to sustain the current levels, it will indicate profit booking that can drag the EOS/USD pair back to the 20-day EMA. A breakdown of the uptrend line will complete a rising wedge pattern and shift the advantage to the bears. Until then, any dip towards the 20-day EMA can be used as a buying opportunity.
Binance Coin (BNB) rose above the previous intraday lifetime high of $26.4732350 and made a new high at $26.6428765. However, the bulls could not sustain the new high and the price has retreated back below it.
This shows profit booking at higher levels, but if the bears fail to sink the BNB/USD pair below the 20-day EMA, we anticipate another attempt by the bulls to make a new high. Both the moving averages are trending up and the RSI is in positive territory. This suggests that the bulls are in command.
However, if the price plunges below the 20-day EMA, it can drop to the 50-day SMA. A breakdown of this support will signal a deeper correction. We remain bullish and on the lookout for a reliable pattern that offers an attractive risk to reward ratio.
Stellar (XLM) again broke below the uptrend line but found buyers at lower levels. While the repeated breach of a support line weakens it, the bears have not been able to sustain the price below the uptrend line. A breakdown of $0.09478125 can sink the digital currency to $0.08.
But, if the XLM/USD pair breaks out of the moving averages, it can rise to $0.12039489 and above it to $0.13250273. Currently, both the moving averages are flat and the RSI is just below 50. This points to a possible consolidation in the short term. We do not find any reliable buy setup, hence, we are not suggesting a long position in it.
Cardano (ADA) is trying to break out of the 20-day EMA and the downtrend line. If successful, it can move up to $0.082952 and above it to $0.094256. However, the flat 20-day EMA and the RSI close to the midpoint suggest that range-bound trading is probable.
If the ADA/USD pair turns down from the current levels or from one of the overhead resistances, it can remain range bound for a few days. It will turn negative on a breakdown of $0.063230.
The pair will complete a cup and handle formation if it closes (UTC time frame) above $0.094256. We will wait for the price to ascend $0.094256 before suggesting any long positions in it.
Tron (TRX) has been attempting to break out of the moving averages. If the price sustains above it, it will move up to the next overhead resistance of $0.02815521. The bulls have broken out of this level previously, but have not been able to sustain the breakout.
If the TRX/USD pair breaks out of the overhead resistance once again, it will offer an opportunity to go long. The pair has been consolidating for the past nine months, which indicates that the ensuing breakout will show a big move. Therefore, we retain the buy recommendation given in the previous analysis.
Contrary to our assumption, if the cryptocurrency turns down from the current levels, it can correct to $0.02094452. A break of this level will sink it to the critical support of $0.01830.
Market data is provided by the HitBTC exchange. Charts for analysis are provided by TradingView.