Top coins are shaky as Bitcoin falls back below the $4,000 mark, but increased institutional interest — like Coinbase’s new OTC desk — could signal a turnaround.
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Market data is provided by the HitBTC exchange.
Over-the-counter (OTC) trading desks usually cater to institutional or large individual traders. While retail traders are dumping their holdings in cryptocurrencies, institutional traders are using the opportunity to buy. Higher demand from large traders has encouraged U.S. cryptocurrency exchange Coinbase to start an OTC desk for its selected customers. This shows that it is only a matter of time before the tide turns from down to up.
After a crushing bear market, one expects the volume to dry up due to the lack of buying interest. However, the notional volume of Bitcoin traded this year has already touched the $2.2 trillion mark, according to Satoshi Capital Research. The growth clocked this year is more than 61 percent over the previous year’s total volume of $870 billion. The numbers will soar after the markets turn bullish in 2019.
Global funds network Calastone, which processes mutual fund trades for over 1,700 financial companies, will use blockchain for its entire system of fund trade clearing services. Deloitte, one of the “Big Four” audit firms, estimates that the use of blockchain will save $4.3 billion to the global fund industry, excluding the U.S. market.
Even after the fall, cryptocurrencies continue to figure into the discussions of world leaders and policy makers. Recently, the G20 countries called for a tax on all cross-border cryptocurrency payment services and regulation to prevent money laundering.
Bitcoin has formed a pennant, which is a continuation pattern. A breakdown and close (UTC time frame) below the trendline of the pennant will resume the downtrend and has a pattern target of $2,416.52.
The support levels that can stall the fall are $3,620.26 and below that the critical support of $3,000. The moving averages continue to trend down and the RSI is close to the oversold zone, which shows that the bears have an upper hand.
Failure of the BTC/USD pair to even reach the 38.2 percent Fibonacci retracement level of the recent fall shows the kind of selling on every pullback. Considering the bearish pattern and the negative sentiment, traders can raise the stops on half of the position to $3,800 and keep the rest at $3,500.
The bearish view will be invalid if the bulls buy the breakdown and the virtual currency reverses direction, breaking out of $4,500. Until then, the path of least resistance is to the downside.
Ripple is struggling to pull back. The 20-day EMA has turned down and the RSI is close to the oversold levels. This shows that the bears are overpowering the bulls in the short term.
The first level to watch on the downside is $0.33108. Below this, the next support is at the Nov. 25 intraday low of $0.31123. A break of this level will result in a retest of the critical support at $0.24508. Traders can watch the $0.30 level closely and liquidate positions if the bears sustain the price below the support line of the descending channel.
If the XRP/USD pair attracts buyers at one of the above-mentioned support levels, it will move up to $0.40, which will act as a major resistance, as the 20-day EMA is located at this level. After this level is crossed, we expect the bulls to pick up momentum.
Ethereum has been trading inside the tight range of $130.50–$102.20 for the past ten days. A breakdown of the range will resume the downtrend. The first target on the downside is $83.
Contrarily, if the bulls succeed in defending the bottom of the range, the ETH/USD pair might extend its consolidation for a few more days.
Both the down-trending moving averages will act as a resistance on any pullback. A breakout of the range and the 20-day EMA can result in a rally to $167.32. Traders can remain on the sidelines until a trend reversal is signaled.
Bitcoin Cash has drifted closer to the bottom of the $204.76–$148.27 range. A breakdown of this range will resume the downtrend that has a lower target of $100.
Though the RSI is in oversold territory, there is still no sign of buying by the bulls. We shall turn bullish on the BCH/USD pair if it breaks out and closes (UTC time frame) above the top of the range. The trend is clearly down and supply is much greater than demand.
After failing to break out of the overhead resistance of $0.184, Stellar has turned down, which shows a lack of buying at higher levels.
There is a minor support closer to the current levels, below which a retest of $0.13427050 will be in the cards. A breakdown of this level will resume the downtrend and can sink the price to $0.08.
On the upside, the XLM/USD pair will face a stiff resistance at $0.184. The 20-day EMA is also located just above this level. Hence, if the bulls scale these resistances, it will signal strength. Until then, traders should avoid any positive setting.
EOS has been making new year-to-date lows on a regular basis. This shows that the bulls are not showing any interest in buying. Every pullback in the past few days has hit a roadblock after a day of recovery.
The next support on the downside is $2.40, below which, the fall can extend to $2. Both the moving averages are sloping down and the RSI continues to languish in the oversold territory.
A breakout of the downtrend line and the 20-day EMA will be the first sign of a change in trend. The traders should wait for a new buy setup to form before initiating a long position in the EOS/USD pair.
Litecoin failed to break out of the 20-day EMA in the past few days, which shows that the bears are not waiting for higher prices to sell. On the other hand, the buying also dries up at higher levels.
Therefore, the LTC/USD pair is likely to retest the support at $28. A break of this level will resume the downtrend and can drag prices lower to $20.
If the bulls bounce off the supports and break out of the 20-day EMA, the virtual currency can rally to the next overhead resistance at $47.246. Both the moving averages are sloping down and the RSI is in the negative territory. This suggests that the bears have an advantage.
Cardano has been trading in a tight range for the past few days. One small positive is that it has been trading in the top half of the range, which shows some buying pressure.
Any breakout of the range will face a minor resistance at the 20-day EMA, which is currently at $0.048. If the bulls break out of this, the next resistance is at $0.060105. Short-term traders can wait for a close above the range and then ride the move higher. However, as this is a high risk trade, please keep the position size small.
Contrary to our expectation, if the ADA/USD pair plunges below the range, it can resume its downtrend to the next target of $0.025954. Position traders should wait for a new uptrend to begin before initiating any long positions.
After bouncing off the lows of $0.01089965, TRON has been facing a stiff resistance from the 20-day EMA, that is sloping down. Just above the 20-day EMA is the previous support-turned-resistance of $0.183. If the price turns down from either of the resistance levels, a retest of the lows is likely. If the lows are breached, the fall can extend to $0.00844479.
However, if the bulls succeed in scaling above $0.183, it will be a positive move. It will indicate that the recent breakdown was a bear trap.
Another possibility is that the TRX/USD pair consolidates below $0.183 for a few days. Either way, it is best to wait for a new buy setup to form before jumping in.
Monero is in a downtrend. Both the downtrending moving averages and the RSI point to a further fall.
If the bears break down of the recent lows of $53, a fall to the next lower level of $40 is probable. On the upside, the bulls will face stiff resistance in the $66–$70 zone.
The XMR/USD pair is yet to form a bottoming pattern. Hence, traders should wait until the trend reverses for establishing any fresh positions.
Market data is provided by the HitBTC exchange. Charts for analysis are provided by TradingView.