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The market data is provided by the HitBTC exchange.
Though cryptocurrencies are stuck in a bear market, it hasn’t managed to scare away investors. A report by the Satis Group predicts digital currency trading volume to grow by over 50 percent in 2019. They also anticipate a compound annual growth rate (CAGR) of about 9 percent all the way until 2028.
Several nations are introducing measures to benefit from the increased adoption of the blockchain technology and crypto trading. Many top players in the crypto space urged the U.S. regulators to come up with clear crypto regulations, the alternative being to lose out to competition.
Similarly, tech giants are warming up to cryptocurrencies. Google has partially reversed its ad ban for cryptocurrency exchanges advertising in the U.S. and Japan. The fundamentals of the sector are improving and investors are likely to jump on the bandwagon once a confirmed bottom is in place.
Let’s identify digital currencies that have completed a bottom formation.
Bitcoin failed to hold the support at $6,583.46 and dipped to a low of $6,341 on September 25. A break of $6,341 can result in a decline to the critical support zone of$5,900–$6,075.
The BTC/USD pair is currently attempting to scale above $6,583.46 once again. If successful, a move to the downtrend line of the descending triangle is probable. A break out of this will invalidate the bearish pattern, which should invite short covering.
The pair should pick up momentum above $7,413.46 and quickly rise to $8,566.4.
Both moving averages are flat and the RSI is close to the midpoint, indicating that the bulls and the bears are in a state of equilibrium. A fall below $6,341 will tip the scale in favor of the bears, while a rally above the downtrend line will win it for the bulls.
Traders can hold their long positions with the stops at $5,900.
Ethereum has dipped below the 20-day EMA but is trying to hold the $200 mark. A break of this can extend the correction to $192.5 and further to $167.32.
On the upside, the ETH/USD pair will face resistance at the 20-day EMA and the 50-day SMA. Though the trend is down, the 20-day EMA is flattening, which shows that the selling pressure in the near-term has weakened.
The first sign of a change in trend will be when the price scales above the 50-day SMA. We shall wait for the breakout before proposing a trade on it.
Ripple has started a new uptrend. The upsloping moving averages and the RSI close to the overbought territory indicate that the buyers have an edge in the near-term.
We had expected the current pullback to end between the 50 percent and 61.8 percent Fibonacci retracement levels and that is what happened. Prices bounced sharply from $0.435 on September 25.
Currently, the higher levels are witnessing some profit booking. After such a volatile rally, the XRP/USD pair might enter a consolidation period for a few days, before resuming its uptrend. Therefore, we shall wait to buy on dips or on a confirmation of the resumption of the uptrend. Our bullish view will be invalidated if the bears sustain the price below $0.4255.
After underperforming in the current pullback, Bitcoin Cash has made a sharp upward move today. It is attempting to break out of the 50-day SMA and the resistance line of the descending channel.
If the bulls succeed in closing (UTC time frame) above the channel, a rally to $660 is probable. A breakout will also signal a change in trend.
If the bears defend the overhead resistance, the BCH/USD pair might remain inside the descending channel. The traders can start a position on the long side after the price sustains above the channel. The stops can be kept at $400.
EOS is currently range bound but is struggling to hold the critical support at the moving averages. A break of the 50-day SMA can result in a fall to $4.493
The EOS/USD pair will resume its downtrend if the bears break and close below $4.493. Therefore, traders should protect their long positions with stops at $4.4.
Any recovery attempt will face resistance at $5.65 and above that at $6.3117. The digital currency will pick up momentum above $6.8299.
Stellar dipped below the critical support of $0.24987525, both yesterday and today. On both occasions, the 20-day EMA provided a strong support.
The bulls will again try to break out of the downtrend line of the descending triangle. If successful, a retest of the September 23 intraday high of $0.30434761 will be on the cards.
The XLM/USD pair will invalidate the bearish descending triangle pattern if it sustains above the downtrend line for three days. This is a bullish sign and can lead to a rally to $0.36 and higher. Therefore, we suggest traders hold their long positions with the stops at $0.21.
On the downside, a break of the 20-day EMA can sink the virtual currency to $0.21489857, below which a retest of $0.184 is possible.
Litecoin is currently range bound between $49.466 and $69.279. As the previous trend leading into the consolidation was down, we have to wait for a breakout to confirm a change in trend. Any break down from the range will resume the downtrend.
Both moving averages are flat and the RSI is close to the midpoint. This shows balance between demand and supply.
The first sign of a change in trend will be when the LTC/USD pair breaks out and sustains above $69.279. Such a move will complete a double bottom at $49 and can result in a rally to $89–$94. Hence, the traders can initiate long positions on a breakout and close above the range.
We won’t find any buy setups for as long as the pair keeps trading inside the range.
Cardano is attempting to bounce off the support at $0.071355. If successful, it will again try to break out of the 50-day SMA and the intraday high of September 23.
The 20-day EMA is flat and the RSI is near the neutral zone. This shows that the selling has subsided but the buyers are yet to return. There are no buy setups on it yet.
The ADA/USD is likely to form a range for a few days before starting a new uptrend. Our neutral view will be invalidated if the bears sink the price below $0.071355.
The bulls have been trying to hang on to the 20-day EMA for the past two days. However, they haven’t been able to push the price higher. Monero has a strong support between the 20-day EMA and the 50-day SMA.
The XMR/USD pair will weaken if it breaks down and sustains below the trendline of the triangle. In such a case, the lower targets of $96.390 and $87.382 will come into play before a retest of the lows. Hence, we recommend traders hold their existing long positions with the stop loss at $100.
A strong bounce from the current levels can carry the virtual currency to $128.650 and thereafter to $142.710.
Dash is currently range bound, with both moving averages flat and the RSI close to neutral territory. This increases the possibility of the virtual currency being stuck within the boundaries of $130.024–$224.830. The longer the time spent in the range, the stronger will be the eventual breakout from it.
Currently, the DASH/USD pair is taking support at the 50-day SMA. We anticipate a strong defense of $160 by the bulls because if this support breaks, the virtual currency will retest the lows.
On the upside, a break out of $224.830 will signal a probable 1-2-3 bottom. Though there is a stiff resistance close to $278, we shall attempt a buy if the price sustains above the overhead resistance for three days. Until then, we suggest traders remain on the sidelines.
The market data is provided by the HitBTC exchange. The charts for the analysis are provided by TradingView.