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The market data is provided by the HitBTC exchange.
The current bear market in cryptocurrencies will turn out to be a boon in the long-term. The rally in 2017 had become frothy and attracted mostly retail traders who dreamt of becoming rich overnight. This was not good for the longevity of the virtual currencies.
The institutional investors don’t enter in a ‘bubble-like’ environment. Now, with most of the froth removed, we get rumors of some big names showing interest in investing in the digital currencies.
A name that stands out is that of the legendary investor George Soros. Bloomberg’s sources confirmed that Adam Fisher, the person in charge of global macroeconomic investing at Soros Fund Management, has received the green signal to proceed with cryptocurrency investing.
Another very prominent investor to enter into the crypto world is the Rockefeller family, through their official venture capital arm Venrock.
These are not all, as there are a few other macro managers who are showing interest in digital currencies.
If the institutional money starts pouring in, it will put a floor beneath most of the larger cryptocurrencies. Let’s see if we can find any signs of a bottom in them.
Bitcoin remains stuck in a downtrend. It is currently sliding towards the support of $6,757.26, after failing to break out of the resistance line of the descending channel. If the bears break below the support, a fall to $6075.04 is possible.
In the very short-term, the BTC/USD pair has formed a descending triangle pattern, which will complete on a breakdown below $6757.26. The pattern target on the downside is $5435.66.
If the bulls defend the $6757.26 levels and subsequently break out of the 20-day EMA, it will signal strength. We shall wait for buyers to emerge before recommending any long positions.
The bulls attempted to break out of the tight range but prices could not sustain the higher levels. As a result, Ethereum has again fallen into the range.
Now, the bears will attempt to break down of the range. If successful, the ETH/USD pair will resume its journey towards its lower target objective of $300.
Considering the strong downtrend, we shall wait for the cryptocurrency to break out of the descending channel before proposing any trades.
We are yet to see any strong buying in Bitcoin Cash. The bulls are making a half hearted attempt to push prices towards the resistance line of the descending channel.
At $778.2021, there is a confluence of three resistances, the 20-day EMA, the resistance line of the descending channel and the horizontal line.
Prices will gain strength only above this level. Until then, the bears will continue to sell on rallies.
We shall turn positive on the BCH/USD pair only after it sustains above $780 levels for a couple of days.
Ripple held the April 01 lows of $0.45351 and is trying to recover, but the buying is very sluggish. Its overhead resistance is at $0.56270.
The XRP/USD pair can remain range bound between $0.45351 and $0.56270 for the next few days.
Once the virtual currency breaks out of this range, it can rally to the $0.72, where it will face resistance from the 50-day SMA. A breakdown of the consolidation will sink it to $0.35 levels.
We shall wait for a confirmed break out and close above $0.56270 before recommending any trade.
Stellar has held its first critical support level of $0.184 but it has turned down from the 20-day EMA. If price breaks down of the immediate support, it can decline to $0.16.
If the XLM/USD pair breaks out of the 20-day EMA, it can rally to the resistance line of the descending channel. The digital currency has been trading inside the channel since early January of this year. Hence, a break out of this will be a significant event and will signal a change in trend.
We shall wait for a breakout and close (UTC time frame) above the resistance line before proposing any trades.
Litecoin held the first support level of $114.706 but its recovery attempt stalled at $126. It could not even reach the downtrend line 1. The 20-day EMA is also located close to this line.
If the bears break below $114.706, the LTC/USD pair can fall to $107.102, which is a February 02 low. This should act as a strong support but if this also breaks, the next support on the downside is at $84.706.
First signs of a change in trend will be when the digital currency breaks out and sustains above the downtrend line 1.
Though Cardano continues to trade in a range, it is forming a bullish ascending triangle pattern, which will complete on a breakout above 0.00002460 levels.
The pattern target of a breakout above the upper end of the range is 0.0000323, but we believe that the up move can extend to 0.000035 levels.
Hence, we suggest a long position on the ADA/BTC pair on a breakout and close (UTC time frame) above 0.0000246. The stop loss for the trade can be kept at 0.00002.
If the bulls fail to achieve the breakout, a few more days of range bound action will continue.
The bulls have held onto the $44 levels for the last few days, resulting in a pullback, which carried NEO to the 20-day EMA.
The zone between the 20-day EMA and $63.62 is a major resistance. Once this zone is crossed, the NEO/USD pair will turn positive in the short term and rally towards the 50-day SMA at $83 and above this to the downtrend line.
However, if the bulls fail to break out of the overhead resistance, we might see another attempt to break the $44 levels.
We shall recommend a buy on the digital currency around the $65 mark.
EOS tried to break out of the descending channel for the second time within five days but failed. It is showing strength but it has a slew of resistances from the current levels up to $7.28.
We like the EOS/USD pair because it did not revisit its March 18 lows of $3.8723 in the recent correction. This shows that the buyers are accumulating on every small dip and there is a lack of sellers at these levels.
We have recommended initiating long positions at $7.5 after the virtual currency clears the overhead resistances. This will pave way for a rally to $11 levels. The stop loss can be kept at $5 initially, which can be trailed higher subsequently.
The market data is provided by the HitBTC exchange. The charts for the analysis are provided by TradingView.