Bitcoin is pulling crypto markets higher. What are the levels to watch out for on the upside?
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Market data is provided by the HitBTC exchange.
Bitcoin is back at doing what it does best, break out and rally on weekends. It again made a decisive move during the weekend and is pulling the crypto markets higher. The total market capitalization of cryptocurrencies has topped $278 billion and is on its way to the $300 billion mark. This will signal a stupendous comeback from the lows of about $100 billion in mid-December of last year. The rally has been led by Bitcoin and a number of major altcoins have responded positively.
In terms of magnitude of the rise, if the bulls can sustain the current levels or push the prices even higher in the next couple of days, this month will be one of the best months since August 2017. When an asset class is in momentum, it is difficult to predict the end of the rally. Still, we believe that Bitcoin will face a lot of supply between the current levels and $10,000. Vertical rallies are usually unsustainable and can result in waterfall declines. Therefore, traders who still have positions should protect their positions with a suitable stop loss.
BTC/USD
Bitcoin (BTC) prices surged on the weekend. With the latest push, the cryptocurrency has scaled another critical resistance of $8,496.53. It can now rally to the next overhead resistance of $10,000. Both the moving averages are sloping up and the RSI is overbought territory. This shows that the bulls are in command.
But if the bulls fail to sustain the breakout, the BTC/USD pair might drop back below the support of $8,496.53. The momentum will weaken if the bears break down of the 20-day EMA. Until then, every dip is likely to be purchased. The bears will make a comeback if the leading cryptocurrency falls below $7,413.46.
ETH/USD
Ethereum (ETH) bounced off sharply from the 20-day EMA on May 26. We like the way it has shot up. It is now on its way to challenge $290.92. If the bulls scale this level, the cryptocurrency can rally to the $300–$322 resistance zone.
Both the moving averages are sloping up and the RSI is in the overbought zone. This suggests that the path of least resistance is to the upside. Contrary to our assumption, if the ETH/USD pair fails to rally above $290.92, the pair might remain range bound for a few days. The trend will weaken if the bears sink the cryptocurrency below the support of $225.39.
XRP/USD
Ripple (XRP) has bounced off the 20-day EMA. It should now attempt to reach the overhead resistance of $0.45. The 20-day EMA is sloping up and the RSI is in positive territory, which suggests that the bulls have the upper hand. If the buyers propel the cryptocurrency above $0.47919, a rally to $0.60 is probable.
On the other hand, if the bulls fail to scale the overhead resistance of $0.47919, the XRP/USD pair can dip to the 20-day EMA. A breakdown of this support can plummet the price to $0.33108. For now, the stops on the long positions can be retained at $0.2750. We will soon trail the stops to $0.35.
BCH/USD
The rebound from the 20-day EMA has carried Bitcoin Cash (BCH) to the overhead resistance of $452 where it is facing some selling. A breakout of $452 can push the price to the resistance line of the ascending channel. If this is also scaled, the cryptocurrency might quickly move up to $638.99. With both the moving averages trending up and the RSI close to the overbought zone, the advantage is with the bulls.
But if the BCH/USD pair reverses direction from $452 or from the resistance line of the ascending channel, it can decline to the 20-day EMA. A breakdown of this support will indicate further weakness and can result in a fall to the support line of the channel. Currently, we do not find a reliable buy setup, hence, we are not proposing a trade in it.
LTC/USD
Litecoin (LTC) has continued to move up after breaking out of the overhead resistance on May 24. Both the moving averages are sloping up and the RSI is close to the overbought zone. This shows that the bulls are in command. The target objective on the upside is $158.91.
However, it is unlikely to be a straight dash to the target levels. The LTC/USD pair might halt at $127.6180. We will continue to trail the stops higher as the pair moves up. Our bullish view will be invalidated if the cryptocurrency reverses direction and plummets below the strong support of $91. Therefore, the stops on the long positions can be kept at $80. The only red flag on the chart is the negative divergence on the RSI.
EOS/USD
EOS closed (UTC time frame) above the overhead resistance of $6.8299 on May 26, which is a bullish sign. The bulls have extended the rally and have cleared the resistance line of the channel, which increases the probability of a move to $9 and above it to $9.60. With both the moving averages sloping up and the RSI close to the overbought zone, the advantage is with the bulls.
The bulls will lose their advantage if the EOS/USD pair fails to sustain the breakout of the ascending channel. The previous resistance turned support of $6.8299 is the critical level to watch out for on the downside. A breakdown of $6.8299 can plummet the pair to the 20-day EMA, below which the bears will gain the upper hand.
BNB/USD
Though Binance Coin (BNB) broke out of the resistance line and made a new lifetime high on May 26, it could not sustain the higher levels and closed (UTC time frame) below the resistance line. Currently, the bulls are again trying to push the price above the resistance line, after which it can move up to $40 and above it to $46.1645899.
Conversely, if the bulls fail to scale the resistance line, the BNB/USD pair might correct to the 20-day EMA once again, which is likely to act as a strong support. Both the moving averages are sloping up and the RSI in the overbought zone, which confirms that the trend favors the bulls. The first sign of weakness will be a break below the 20-day EMA. Until then, the bulls are likely to buy the dips. We will wait for a suitable entry point to suggest a trade in it.
XLM/USD
Stellar (XLM) has been holding above the 20-day EMA for the past few days. This is a positive sign. The bulls will now try to push the price through the overhead resistance of $0.14861760. If successful, the digital currency will complete an inverted head and shoulders pattern that has a target objective of $0.22466773. Traders can wait for a close (UTC time frame) above $0.14861760 to buy and keep the stop loss just below $0.1150.
Our view will be negated if the XLM/USD pair fails to climb above the overhead resistance. It can, thereafter, remain range bound between $0.11507853 and $0.147620 for the next few days. The pair will turn negative if it plunges below both the moving averages.
ADA/USD
Cardano (ADA) has held the support of the moving averages and has bounced off it. This is a positive sign. It should now attempt to ascend its overhead resistance of $0.094256. A breakout and close above this level will complete a reversal pattern that has a target objective of $0.161275.
Our bullish view will be invalidated if the ADA/USD pair turns down from the overhead resistance and slides below the moving averages. In such a case, a drop to the next support of $0.057898 is probable. The 20-day EMA has gradually started to move up and the RSI is attempting to push further into the positive territory. This suggests that the bulls are attempting to make a comeback. Hence, traders can keep an eye on our recommendation given in an earlier analysis.
TRX/USD
Tron (TRX) broke out and closed (UTC time frame) above the overhead resistance of $0.02815521 on May 26, which is a bullish sign. It should now move up to its first target objective of $0.040. Though there is a minor resistance at $0.03575668, we expect it to be crossed. As the cryptocurrency has broken out of the range after a long time, we expect the rally to surprise on the upside and reach $0.050.
After a breakout, a retest of the breakout levels is likely. The TRX/USD pair can dip back to the support of $0.02815521, which is likely to hold. The 20-day EMA has started to turn up and the RSI is lose to the overbought zone. This suggests that the bulls have the upper hand.
However, the pair has repeatedly failed to sustain its previous breakouts. If the bears sink the cryptocurrency back into the range, it will lose momentum. Therefore, we are cautious and would like to reduce our risk. We suggest traders trail the stops on the long positions to $0.025.
Market data is provided by the HitBTC exchange. Charts for analysis are provided by TradingView.
