While institutional players more often recognize crypto as a new asset class, it still faces challenges. Once indecision resolves, we are likely to see a number of buyers jump in.
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Market data is provided by the HitBTC exchange.
The sharp drop in Bitcoin’s volatility at a time when the volatility in the U.S. stock markets soared is a sign that cryptocurrencies have decoupled from equity markets. It has emerged as an independent asset class, buoyed by fundamentals.
A recent report by Morgan Stanley bank also underlines the emergence of Bitcoin and altcoins as “a new institutional investment class.” However, any new asset has to face numerous hurdles in the beginning. Cryptocurrencies are currently going through the phase of denial, before they reach acceptance.
As soon as this indecision resolves, we are likely to see a number of buyers, who are currently sitting on the sidelines, jump in. Galaxy Digital CEO Michael Novogratz believes that 2019 will be an important year, predicting that Bitcoin will break $10,000 in Q1 and continue its journey northward to reach $20,000 or more by the end of the year.
While the larger players are focused on Bitcoin, there is a tussle between the top two altcoins for the second spot. Ripple recently surpassed Ethereum for a short period of time as the leading altcoin by market capitalization, before Ethereum reclaimed its position.
The cryptocurrency market seems to be slowly returning back to life. Let’s see which coins are likely to rally from current levels.
Bitcoin is trying to sustain above the moving averages. On a close above $6,654.51, it can rally to $6,831.99. The price has turned down three times from this resistance, so this is a key level to watch on the upside. A break out of this can propel the cryptocurrency to $7,400. The moving averages are flat, which shows a balance between the bulls and the bears.
A failure to break out of $6,831.99 will extend the stay inside the range. On the downside, $6,200 has been acting as a strong support. If this level breaks, a retest of the critical support zone at $5,900–$6,075.04 is probable.
The BTC/USD pair will become negative on a break down of $5,900. The lower supports are at $5,450 and $5,000. Therefore, traders holding long positions can keep their stops at $5,900.
Ethereum has risen above the moving averages. It should now attempt to gradually move up to $249.93.
First signs of a trend reversal will be when the ETH/USD pair sustains above the range. Such a move could carry it to $300, and further to $322. Therefore, traders can wait for a close (UTC time frame) above $249.93 and buy with a suitable stop loss.
If the bears defend the overhead resistance, the digital currency will continue to trade inside the range for the next few days. The downtrend will resume on a breakdown below $188.35 and $167.32.
Ripple triggered our buy proposed on Oct. 31 when it closed (UTC time frame) above $0.48 on Nov. 5. Though the bears attempted to sink the pair on Nov. 6, it found support at the moving averages and rallied back up.
Today, the XRP/USD pair is again facing resistance at $0.55. If the bulls can defend the moving averages and push the price above this overhead resistance, a rally to $0.62 is probable. Partial profits can be booked at this level and the rest of the position can be held with a close stop loss, because above $0.62, a rally to $0.7644 is likely.
The upward sloping moving averages and the RSI close to the overbought territory shows that the short-term trend is bullish. If the virtual currency slides below the moving averages, it will invalidate our bullish view. Therefore, traders can keep an initial stop loss of $0.425.
In the past seven days, Bitcoin Cash has risen about 55 percent, which is a bullish sign. It is currently knocking on the overhead resistance of $660.0753, from where it had rebounded in early September.
It is difficult to predict the reaction of the BCH/USD pair following the fork. Therefore, traders can book partial profits at the current levels and hold the rest with a suitable stop loss.
If the bulls push the price above $660.0753, the digital currency can rally to $850. Therefore, we are not suggesting to close the entire position. The 20-day EMA has turned up, which is a positive sign.
As the RSI has reached the overbought territory, the virtual currency can consolidate for a couple of days. Our bullish view will be invalidated if the bears sink the price below $400.
EOS has climbed close to the top of the tight range. The bulls have failed to break out of this range since Sept. 24, so we expect a strong defense of this level.
A breakout can propel the EOS/USD pair to $6.8299, above which it is likely to pick up momentum and rally to $9.1668, and further to $11.4. Therefore, traders who are long can keep their protective stops at $4.9, just below the support of the tight range.
If the bulls fail to break out of the range, the pair can slide to the bottom of the range at $5, below which a fall to $4.493 is possible.
Stellar has broken out of the downtrend line of the descending triangle with force, which is a bullish sign. With the latest move, it has invalidated the bearish pattern. Though it did not trigger our buy suggested in the previous analysis, it has sustained above the downtrend line for two days.
Therefore, we advocate initiating long positions on a breakout above $0.275. The target objective is a rally to $0.36. If the bears defend the overhead resistance at $0.304, traders can either trail the stops higher or close the positions.
Our bullish view will be invalidated if the XLM/USD pair turns down from the current levels and breaks down of the moving averages. The initial stops can be kept at $0.2, which can be raised quickly, depending on the price action.
As forecast in our previous analysis, the bears are defending the zone between the 50-day SMA and the downtrend line. Therefore, we had recommended booking partial profits when Litecoin approaches the downtrend line.
We have not proposed booking complete profits because a break out of the downtrend line can result in a rally to $69.279. Therefore, traders who have booked partial profits can trail the stops on the remaining position to $50.
We anticipate the 20-day EMA to offer a strong support on any dip from the current levels. Both moving averages are flat, which points to a continuation of the consolidation. The LTC/USD pair will resume its downtrend if it dips below $47.246.
Cardano broke below the symmetrical triangle on Oct. 29, but the bears could not break the support at $0.068989. This led to a pullback that has now carried the virtual currency to the resistance line of the symmetrical triangle.
The bulls are currently facing resistance at $0.082207, above which a rally to $0.094256 is probable. On the other hand, if the ADA/USD pair struggles to break out of the immediate resistance, it will slip back and remain stuck in the range of $0.068989–$0.082207.
We couldn’t find any reliable buy setups at the current levels; hence, we remain neutral on the pair. We shall suggest a long position if we see buyers return.
Though Monero has held above $112.44 for the past three days, it has failed to pick up momentum. This shows a lack of demand at higher levels.
Previously, from Sept. 25 to Oct. 10, the bulls could not build up momentum, resulting in a fall to the bottom of the tight range.
If the bears sink the XMR/USD pair below the moving averages, it will re-enter the tight range between $100.453 and $112.44 once again. We couldn’t find a reliable buy setup at the current levels, so we are not suggesting any trades.
TRON continues to trade inside the range with a mild positive bias. The price has risen above both moving averages, but is struggling to find buyers at higher levels.
As long as the TRX/USD pair remains in a range, we expect random movements that are difficult to trade. It will make a decisive move either on a breakout or break down from the range.
A rally above the Oct. 15 intraday highs is likely to push the price towards $0.04158193. However, on two occasions, the bulls had broken out of the overhead resistance but failed to sustain the prices above it. Therefore, traders should wait for the digital currency to close (UTC time frame) above $0.03 before initiating long positions. The trend will turn negative if the bears sink the price below $0.0183.
Market data is provided by the HitBTC exchange. Charts for analysis are provided by TradingView.