Although the crypto bear market is scaring away retail investors, institutional players are using the current fall to invest in various blockchain and crypto firms.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.
The market data is provided by the HitBTC exchange.
Investment firm Tiger Global is “finishing negotiations” to buy a stake worth about $500 million in one of the largest U.S. crypto companies Coinbase, at a reported valuation of around $8 billion. Tiger is a reputed firm led by savvy investors, hence this investment might grab the attention of other hedge funds, some of which have been looking to make a similar investment.
Although the crypto bear market is scaring away retail investors, institutional players are using the current fall to invest in various blockchain and crypto firms. A report by Diar shows that venture capital firms have pumped almost $3.9 billion into crypto and blockchain firms so far in 2018. This is a 280 percent increase from 2017.
While the fundamentals are improving, the manipulation of the crypto prices by automated trading programs, or bots, is hurting the small investors and the overall reputation of the industry.
The lack of proper regulations is encouraging the use of bots for manipulative strategies. Such bots are outlawed in the traditional equity and derivatives markets.
Therefore, retail investors should only commit an amount they can afford to lose, and they should always trade with proper stop losses (SLs).
Bitcoin has broken down of both moving averages and the small trendline support. This shows that the sellers have the upper hand in the short-term. However, if the bulls manage to scale the price back above the trendline and the moving averages, it will indicate demand at lower levels.
The longer the price remains below the downtrend line of the descending triangle and the moving averages, the greater are the chances of a retest of the critical support zone of $5,900–$6,075.
A break out of the downtrend line and $6,831.99 can propel the pair to $7,400, which in turn might act as a strong resistance.
We expect the BTC/USD pair to make a decisive move within the next week. As the price is close to our buy levels, we suggest traders hold the long positions with the stops at $5,900.
Ethereum has been trading between $200 and $250 since Sept. 14. The moving averages have flattened out which shows a balance between the buyers and the sellers.
The 50-day SMA is a critical overhead resistance that hasn’t been scaled since May 24. A break out of this level will be the first indication of the start of a new uptrend that will pick up momentum on a close (UTC time frame) above $322.57.
On the downside, if the bears force the price below $200, the ETH/USD pair can retest the recent low of $167.32. We shall wait for buying to resume before recommending any long positions on it.
Ripple is currently in the center of the range of $0.4255–$0.625. The 20-day EMA is a strong support, below which the cryptocurrency can drop to $0.4255.
A consolidation after a sharp run-up is to be expected. The XRP/USD pair might resume its uptrend if it breaks out and sustains above $0.625.
Both moving averages are sloping up and the RSI is still in the positive territory, which is a bullish sign. Therefore, the traders can hold the long positions with the stops at $0.42.
Bitcoin Cash has been trying to hold above the moving averages since Sept. 29 but hasn’t been able to sustain above $550. The strongest breakouts never look back. If the cryptocurrency doesn’t resume its upward move quickly, it is likely to attract selling.
A break down of the 20-day EMA can result in a retest of the lows, while a rally above $600 will indicate strength.
The BCH/USD pair has a history of vertical rallies, hence, we suggest holding the long position with the stops at $400.
The bulls are attempting to hold EOS above the 50-day SMA, which shows buying at lower levels. A break of this support can sink it to the next support at $5. The flat moving averages and the RSI close to 50 levels shows equilibrium between the bulls and the bears.
On the upside, the EOS/USD pair faces resistance at $6.0473, $6.3117 and $6.8299. The continuation of the head and shoulders pattern will be invalidated above $6.8299, which would be a bullish sign.
As the pair is holding above the 50-day SMA, we recommend holding current long positions with stops at $4.9.
Stellar again turned down from the downtrend line of the descending triangle on Oct. 1 and broke below the 20-day EMA.
If the bulls close (UTC time frame) below the 20-day EMA, the XLM/USD pair can decline to the 50-day SMA, which is a major support.
On the upside, a break out of the downtrend line will be the first indication that the trend is likely to change. The flat moving averages and the RSI close to the midpoint indicates a range formation. The traders can keep the SL on the long positions at $0.21.
Litecoin continues to trade inside the range of $49.466–$69.279. A consolidation after a long downtrend shows that selling has exhausted but the buyers are still not back in full force.
Small rallies, close to the upper end of the range attract profit booking by the short-term traders and drops to the bottom of the range attract buying.
If the bulls break out of the range, we anticipate the start of a new uptrend. However, if the bears manage to sink the LTC/USD pair below the bottom of the range, the downtrend will resume. The traders can wait for a break out of the range to turn positive. Until then, it is best to remain on the sidelines.
The failure of the bulls to break out of the 50-day SMA attracted selling and Cardano broke down of the 20-day EMA.
If the bears succeed in sustaining below the 20-day EMA, the ADA/USD pair can drop to the next support at $0.071355.
Any recovery attempt by the bulls will face a stiff resistance at the 50-day SMA and $0.94256. The 50-day SMA is flat but the 20-day EMA and the RSI are turning down. This shows sellers have an upper hand in the near-term. Therefore, we are not proposing any long positions on it.
Monero has been trading close to the 20-day EMA for the past five days. The price has been sandwiched between the downtrend line and the 50-day SMA.
If the bulls break out of the downtrend line, a rally to the overhead resistance zone of $140–$150 is probable. On a break down below the 50-day SMA, a fall to $96.39 is likely. Therefore, we suggest traders hold their long positions with stops at $100.
We are not proposing to close the position at the current levels because it is not clear which way the XMR/USD pair will move. Moreover, we had recommended investing only a small percentage of the usual position size, hence, the risk is small.
IOTA has been trading inside a range of $0.5000–$0.6170 since Sept. 6. An attempt to break out on Sept. 21 could not sustain and prices turned back the very next day.
Both moving averages are flat and the RSI is marginally in the negative zone. This shows a state of equilibrium between the bulls and the bears.
The IOTA/USD pair will turn bullish if it sustains above $6.5 and will turn bearish if it slumps below $5. It is difficult to predict whether the pair will break out or break down. Traders who don’t have a position should wait for the breakout to sustain before initiating any fresh positions. Others, who are long, should keep a stop loss at around $4.6.
The market data is provided by the HitBTC exchange. The charts for the analysis are provided by TradingView.