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Market data is provided by the HitBTC exchange.
The chief commercial officer of cryptocurrency payments processor BitPay believes that Bitcoin will only rise higher, led by business interest and real use cases for cryptocurrencies around the world. Contrary to this opinion, a report by the United States think tank, the Congressional Research Service, claims that cryptocurrencies are being used for investment purposes and not as money.
Jens Weidmann, president of Germany’s central bank and chairman of the board of the Bank for International Settlements warned that adoption of digital currencies could destabilize the financial system during a crisis.
A recent survey shows that 94% of the 150 university endowments had some kind of exposure in crypto-related projects. Another interesting observation was that 49% of the respondents said that allocation to crypto investments by endowments, in general, is likely to increase over the next 12 months. But how should individual traders approach the crypto markets now? Let us analyze the charts and find out.
Bitcoin (BTC) dipped to the breakout level of $8,496.53 and held it. This is a bullish sign as it shows buying on every minor dip. Now, the bulls will attempt to propel the cryptocurrency above the minor resistance at $8,904.92. If successful, a rally to $10,000 is probable. The moving averages are trending up and the RSI is in the overbought zone. This shows that the bulls are in command. The short-term traders can attempt a quick trade by buying at $8,950 with a stop loss of $8,400. However, as the risk is high, use only 30% of the usual position size. Also, keep trailing the stops higher as the price moves up as this is only a speculative trade.
The BTC/USD pair will lose momentum if it struggles to sustain above $8,904.92 and plunges below $8,496.53. A deeper correction is likely if the 20-day EMA cracks. If the pair plummets below the support zone of $7,413.46–$6,933.90, it will signal that the bears are back in action.
Ethereum (ETH) has been consolidating between $260–$280 for the past two days. This shows that the bulls are not yet booking profits as they expect a further rise. Both the moving averages are sloping higher and the RSI is in the overbought zone. This suggests that the bulls are firmly in the driver’s seat.
The ETH/USD pair will now attempt to scale above the overhead resistance of $290.92. If successful, it can then challenge the $300–$322 resistance zone. We expect the rally to hit a barrier in the zone and either enter a minor correction or a consolidation. As the profit potential is low, we are not suggesting a trade in it. The momentum will weaken if the bears sink the price below the 20-day EMA. A deeper correction can be expected if the support at $225.39 gives way.
Ripple (XRP) is facing profit booking at $0.45. However, the positive point is that it has not given up much ground. This increases the probability of a breakout above the $0.45–$0.47919 resistance zone. The 20-day EMA is turning up and the RSI is in the positive zone. This shows that the bulls are in command.
A breakout of the overhead resistance zone can propel the XRP/USD pair to $0.60. But if the bulls fail to scale above the resistance zone, the pair might remain range-bound between $0.35660 and $0.45 for a few days. A breakdown of the range will signal a deeper correction. Traders can trail the stop loss on the long positions to $0.35.
Bitcoin Cash (BCH) continues to trade above the 20-day EMA and below the resistance line of the ascending channel. Both the moving averages are trending up and the RSI is in the positive territory. This suggests that the bulls have the upper hand.
The bulls will now try to break out of the resistance line of the channel. If successful, the BCH/USD pair is likely to pick up momentum and rally to $638.99. We might suggest a trade if the price sustains above the channel. Right now, we do not find any reliable trade setup with a good risk to reward ratio.
Our bullish view will be invalidated if the pair turns down from the overhead resistance and breaks down of the 20-day EMA. In such a case, it can drop to the 50-day SMA.
Litecoin (LTC) is in an uptrend. Both the moving averages are sloping up and the RSI is close to the overbought zone. This suggests that the bulls have the advantage. However, the negative divergence on the RSI is a red flag that warrants caution.
If the LTC/USD pair rises above the $121.9018–$127.6180 resistance zone, it can move up to its target objective of $158.91. However, if the pair turns down from the overhead resistance, it can dip towards the 20-day EMA, which is likely to provide support. If this support breaks down, the fall can extend to $91.
Traders can watch the movement of the cryptocurrency close to $121.9018. If it struggles to move above it, 50% of the long positions can be squared off and the stops on the rest can be raised to $90.
EOS broke out of the ascending channel on May 27 and has successfully held the retest of the breakout level today. This is a positive sign. If the bulls push the price and sustain above $8.2728, a rally to $9 and above it to $9.60 is probable. Traders with a high-risk appetite can attempt this trade with a stop loss of $7.50. Considering the risk involved, we suggest keeping the position size about 30% of usual.
On the other hand, if the bears sink the EOS/USD pair back into the ascending channel, it will indicate profit booking at higher levels. The momentum will weaken further if the pair dips below the critical support of $6.8299. If that happens, it might continue to trade inside the ascending channel.
The trend in Binance Coin (BNB) is up. The pullback from the highs found support close to the 20-day EMA. This shows that buyers are keen to get into the cryptocurrency on dips. Both the moving averages are trending up and the RSI is close to the overbought zone. This shows that the bulls have the upper hand.
The BNB/USD pair will again attempt to reach its target objective of $40 and above it $46.1645899. However, the up move will face selling at the resistance line.
If the pair reverses direction from the resistance line, it can again fall to the 20-day EMA. A breakdown of this support will indicate a loss of momentum. The next support to watch on the downside is the 50-day SMA, below which the bears will gain the upper hand.
Stellar (XLM) is facing selling pressure at the overhead resistance of $0.14861760. A breakout and close (UTC time frame) above this level will complete an inverse head and shoulders pattern, which is a bullish sign. The target objective of the reversal pattern is $0.22466773. We retain the buy recommendation given in the previous analysis.
If the bulls fail to scale the overhead resistance, the XLM/USD pair might consolidate between $0.11507853 and $0.147620 for the next few days. A breakdown of this range will indicate weakness and can result in a fall to the right shoulder.
The 20-day EMA is gradually moving up and the RSI is in positive territory. This suggests that bulls have a minor advantage.
Cardano (ADA) has been trading close to the overhead resistance of $0.094256 for the past three days. A consolidation near the resistance is a positive sign as it shows that the bulls are not in a hurry to book profits. However, any action should only be initiated after a breakout and close (UTC time frame) above the resistance level. Traders can initiate the trade as suggested in our earlier analysis.
The 20-day EMA is gradually sloping up and the RSI is in the positive territory. This suggests that the bulls have the upper hand. But if the bulls fail to breakout of the overhead resistance, the ADA/USD pair might remain range bound between $0.0731 and $0.094256 for a few days. A breakdown of this range can plunge the pair to the next support of $0.057898.
Tron (TRX) scaled the resistance at $0.03575668 on May 27 but faced selling just above $0.037. However, the positive point is that the bulls are buying the shallow dips and are unwilling to wait for a deeper correction to own the cryptocurrency. The 20-day EMA has turned up and the RSI is in positive territory. This suggests that the buyers have the upper hand.
The first target objective on the upside is $0.040 and above it, we expect the rally to hit $0.050. Depending on the performance at $0.040, we might suggest to book profits on the partial long positions and trail the stops on the rest.
Our bullish view will be invalidated if the TRX/USD pair reverses direction from the current levels and plummets below the support of $0.02815521. We will watch for a couple of days and then revise the stop loss. For now, the stops can be maintained at $0.025.
Market data is provided by the HitBTC exchange. Charts for analysis are provided by TradingView.
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