Latest technical analysis on top 9 cryptocurrencies from an expert trader.
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The market data is provided by the HitBTC exchange.
St. Louis Fed president James Bullard said that Bitcoin could emerge as a possible competitor to the US dollar in the future. He also did not rule out the prospects of the FED launching its own cryptocurrency, though he said that there was no plan at the moment.
Japan’s Mitsubishi UFJ Financial Group (MUFG), the fifth largest bank in the world by assets, is exploring options to launch its own cryptocurrency, known as MUFG Coin. It plans to test it by the next year.
The existing cryptocurrencies are gearing up for a likely competition by introducing upgrades that can improve operations. Additionally, the crypto exchanges are launching new products targeting the institutional investors.
All of these point to the increasing popularity of cryptocurrencies and the acceptance that the blockchain technology can be a game changer.
The long-term investors should welcome any fall in prices as it offers an opportunity to buy the digital currencies at a discount.
Let’s see if we find any buy setups today.
Bitcoin has broken below the 50-day SMA after holding it for the past four days, which is a bearish development. The only major support now is $7,941.68. If this level breaks, a drop to $7,000 is likely.
If the $7,941.68 level holds, the BTC/USD pair might enter a period of consolidation between $7,941-$10,000. Once the range is confirmed, we shall try to trade it by buying close to the support and covering the position at the resistance.
Currently, there are no buy setups, hence, we suggest waiting until a reliable pattern develops.
Ethereum failed to break out of $745 on May 14 and turned down from there. It has broken below the 20-day EMA today. The small neckline of a possible head and shoulders pattern is providing a strong support level. Today, prices have rebounded sharply from it.
The ETH/USD pair might consolidate between the neckline of the bearish pattern and $745. A break above the overhead resistance will be a positive move. Therefore, we suggest long positions above $750 with a close stop loss. The immediate target is a move to $838. This is a risky trade, hence we recommend traders to take a small position (about 30 percent of usual).
If the bears succeed in breaking and closing below the neckline, the bearish pattern will complete, giving it a target of $418.
However, we believe that $600, which is the 50 percent Fibonacci retracement level and the 50-day SMA will act as strong support on the downside.
Bitcoin Cash has broken down of the neckline of the head and shoulders pattern. If it closes (UTC) below the neckline, it will have a pattern target of $650. However, the bulls are unlikely to give up without a fight.
The levels to watch out for on the downside are the horizontal support at $1221 and the 50-day SMA. We anticipate a bounce from either of these two levels. However, it is difficult to predict whether the rebound will sustain or fail.
Though the 20-day EMA is turning down, the 50-day SMA is still trending up. Hence, we believe that the BCH/USD pair is unlikely to sink to $650. If the $1221 support holds, a range bound action is probable.
It is not clear whether the digital currency will go up or down from the present levels. Hence, we would prefer to watch from the sidelines.
Ripple could not scale above the $0.76 levels on May 14, resulting in a slide below the 50-day SMA. The next support on the downside is the May 12 lows of $0.632. A break below this will sink the digital currency to the $0.562 levels.
If the XRP/USD pair manages to stay above the $0.63 levels, the bulls will again try to break out of the overhead resistance at $0.76.
The 20-day EMA is turning down while the 50-day SMA is flattening out. As prices are quoting below both the moving averages and are some distance away from the critical support of the large range, we shall not propose any long positions.
Stellar turned down from the 20-day EMA as higher levels lacked buyers. Currently, prices are back at the 50-day SMA, which is critical support. If this level breaks, the neckline of the head and shoulders pattern is the final support.
The bearish pattern will complete on a breakdown and close (UTC time frame) below the neckline. The pattern target of such a break is way lower at $0.2.
If the XLM/USD pair either holds the neckline or the 50-day SMA, a range bound action will ensue. Any more above the overhead resistance of $0.47766719 will be very bullish because it will invalidate the bearish pattern. We shall look for buying opportunities above $0.373 levels.
The recovery in Litecoin hit a brick wall at the 20-day EMA on May 14. Currently, prices are again back below the horizontal support at $141. A break below the May 12 lows of $132.163 will open a downside target of $115.
Both the moving averages are turning down. This increases the probability of a drop to the critical support levels of $115, which is expected to hold. If this support breaks, the LTC/USD pair will complete a bearish descending triangle pattern on a breakdown below $107, which will be very negative.
The digital currency is showing weakness; hence, we have no buy recommendations. We shall change our view if the bulls manage to hold the May 12 lows and break out of $170.
Cardano is unable to find buyers at a higher level. The bounce off the trendline and the 50-day SMA on May 12 did not even break above the 20-day EMA. Prices are again back at the supports, increasing the chances of a breakdown.
The 0.000025 levels had held up nicely from April 13 to April 15. So, if the ADA/BTC pair breaks the trendline, it can drop to this level.
The 20-day EMA will continue to act as resistance on any up move. The digital currency will pick up momentum after scaling 0.00003445 levels.
IOTA has not done a great deal in the past five days. It is stuck between the 20-day EMA and the 50-day SMA.
On the upside, immediate resistance is at the 20-day EMA and once this level is crossed the next hurdle is at $2.2117 levels.
On the downside, supports exist at the 50-day SMA and $1.63. Both the moving averages are flattening out, which increases the possibility of a range bound action.
We don’t find any buy setup on the IOTUSD pair, hence, are not suggesting any trade on it.
EOS continues to correct. It is currently at the 50-day SMA, just below the 61.8 percent Fibonacci retracement of the recent rally. This is a critical level and should hold. The subsequent bounce will face resistance at the 20-day EMA and the top trendline of the descending channel.
If the EOS/USD pair breaks below the 50-day SMA, it can decline to the next support at the bottom trendline at $10.
The digital currency has lost momentum and is likely to remain range bound for a few days before starting a new trend. We shall revisit our view if it breaks out and sustains above the descending channel for a couple of days.
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