Markets rally today as execs from several big name institutional players express their optimism about crypto’s future as an asset class.
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Market data is provided by the HitBTC exchange.
After the large-scale wealth disruption in the cryptocurrency space, many have started to question whether the asset class will survive or wither away. New York Stock Exchange (NYSE) chairman Jeffrey Sprecher is positive about the future of digital currencies, saying that their survival as an asset class is “unequivocal.”
Bakkt CEO Kelly Loeffler expressed confidence that the platform’s futures contract will help establish a trusted Bitcoin price for investors, unlike now, when Bitcoin trades at different prices on different exchanges.
Unperturbed by the slump in Bitcoin prices, Nasdaq plans to launch Bitcoin futures trading by Q1 2019, reports Bloomberg. Entry of both these large exchanges shows that there is sufficient demand for Bitcoin trading even after the current decline.
Many believe that the launch of Bitcoin ETFs can increase the demand for cryptocurrencies. SEC Chairman Jay Clayton said yesterday that the commission would need to see upgrades in market surveillance and custody before the regulator would be comfortable with a Bitcoin ETF. Both issues are currently being addressed by various firms, increasing the probability of a Bitcoin ETF in the near future.
A report by the World Trade Organization (WTO) has projected that Blockchain technology can add $3 trillion to the international trade by 2030. The technology will help cut costs by removing barriers, increasing transparency and facilitating process automation.
Though Bitcoin SV has made it into the top 10 cryptocurrencies, we have not included it yet due to its short trading history.
BTC/USD
Bitcoin formed consecutive inside day candlestick patterns on Nov. 26 and 27. Today, the indecision resolved to the upside. The pullback might face minor resistance at the downtrend line.
A breakout of the resistance might attract buying by the aggressive bulls and short covering by the bears. Hence, we have retained the buy recommendation provided in our previous analysis. The key levels to watch on the upside are $4,712.89 and $5,050.40.
If the BTC/USD pair fails to find buyers at higher levels and turns down to break the support of $3,620.26, the downtrend will resume, pushing price to the major support of $3,000.
Though the trend is down, we believe that the pullback will be sharp and is tradeable, hence, we have recommended а long position.
XRP/USD
Ripple is attempting to bounce from the support line of the descending channel. It has been an outperformer during the recent decline as it is well above its year-to-date lows and RSI did not even enter the oversold territory.
A breakout above $0.385 can result in a move to the 20-day EMA, which might act as a resistance. If both the moving averages are crossed, the XRP/USD pair can rally to the resistance line of the channel. Traders can buy a close (UTC time frame) above $0.385 and keep the stop loss at $0.30. The target objective is an up move to $0.50. This is a risky trade, so we recommend to keep the position size about 40 percent of the usual.
Contrary to our expectation, if the price turns down and slides below $0.31123, a retest of $0.24508 is possible.
ETH/USD
Ethereum is trying to bounce after finding support at $102.20. It has a minor hurdle at $123, above which, it can rally to the 20-day EMA. As the trend is down and both the moving averages are sloping down, we anticipate a strong supply in the 20-day EMA zone and $167.32.
If the next leg down holds above $102, it will point to a probable bottom. However, if the bears sink the ETH/USD pair below $102, the next support on the downside is $83.
We believe that the oversold readings on the RSI suggest that a pullback is likely. However, we do not see a reliable buy setup, so we are not recommending a trade in it.
BCH/USD
For the past three days, Bitcoin Cash has been consolidating in the tight range of $204.76–$148.27. It has also formed doji candlesticks in the past two days, which shows indecision. This state is unlikely to remain for long. We should soon see a breakout or a breakdown.
In case of a breakdown, the fall can extend to the next support at $100. However, considering the oversold nature of the RSI, we anticipate a move up.
If the BCH/USD pair breaks out of $204.76, we expect the pullback to reach $242.90 and $272.14. Aggressive traders can try to trade the counter-trend rally by going long on a close (UTC time frame) above $205. The stop loss can be kept just below $147. This is a risky trade, so we recommend using 40 percent of the usual allocation size.
XLM/USD
Stellar is trying to bounce off $0.13427050. It might face stiff resistance in the $0.1547188–$0.184 zone.
A failure to climb above the overhead resistance zone will attract selling that can push the XLM/USD pair to the Nov. 25 lows. If the support breaks, the drop can reach $0.08.
On the other hand, if the bulls scale to the $0.184 level, it will indicate that the current fall was a bear trap. Currently, we do not see any bullish patterns, so we are not suggesting a trade in it.
EOS/USD
Though EOS dipped below the support at $3, the bears could not sustain the lower levels. The bulls are currently attempting to pullback to $3.8723, but the virtual currency might face minor resistance at the downtrend line.
The trend remains down. However, after the initial pullback, we expect the EOS/USD pair to trade in a range for a few days, trying to put a bottom in place. Traders should wait for a trend reversal to initiate long positions.
If the selling pressure during the next down leg is strong and it breaks below the Nov. 27 lows, the decline can stretch to $2.40.
LTC/USD
Litecoin is currently correcting deeply oversold readings on the RSI. The recovery can reach the 20-day EMA, which is likely to act as the first barrier.
As the decline has been sharp, the recovery is also likely to be strong. Above the 20-day EMA, the LTC/USD pair can reach the $47 level. Aggressive traders can try to trade the counter-trend rally, keeping tight stops and aiming for small targets.
Contrary to our opinion, if the pullback fizzles and the bears resume the downtrend, the next support on the downside is $20.
ADA/USD
Cardano formed consecutive inside day patterns on Nov. 26 and 27 that indicate indecision. The uncertainty has resolved to the upside, which increases the probability of a pullback.
The recovery will face a stiff resistance at the 20-day EMA and above it at $0.060105. If the next leg down from one of the resistances breaks below $0.033065, the downtrend can extend to $0.025954.
However, in the next fall, if the ADA/USD pair makes a higher low, it will signal the possibility of a trend change. Traders should wait for a reliable buy setup to form before going long.
XMR/USD
Monero held on to the support of $53.10 on Nov. 26 and 27. The bulls are currently attempting a pullback that might face hurdles at $71, the 20-day EMA and $81.
If the XMR/USD pair turns down from one of the overhead resistances and breaks below $53, the next support is way lower at $40.
The next correction following the pullback will confirm whether a bottom is in place. We expect the digital currency to enter into a range bound action for a few days before starting a new uptrend.
TRX/USD
The pullback in TRON has carried it to the overhead resistance at $0.01587681. The 20-day EMA is also located just above this level. We expect a stiff resistance at this level, but if the bulls break out of it, a rally to $0.0183 is possible.
This should be treated only as a pullback because the trend remains down with both the moving averages sloping down. The next fall will confirm whether a bottom is in place.
A break below the Nov. 25 intraday low of $0.01089965 can sink the TRX/USD pair to the next support at 0.00844479. It is better to wait for a bottom to be confirmed before initiating any long positions.
Market data is provided by the HitBTC exchange. Charts for analysis are provided by TradingView.
