Technical analysis on top 9 cryptocurrencies.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
The market data is provided by the HitBTC exchange.
Will this dent the popularity of cryptocurrencies? Nope.
Can this cause a short-term blip in the prices? Definitely.
The popularity of the cryptocurrencies is based on the underlying technology and not on advertising. Also, Bitcoin and altcoins have faced lot more serious problems in the past and have emerged stronger. This time is not going to be any different.
We consider these dips as an opportunity to get a “piece of the future” at a discount. Read on to see what we can buy today.
We had previously indicated that the initial stop loss for Bitcoin was $7,600, however this has not triggered. Currently, there is a tussle between the bulls and the bears at the $8,000 mark.
The trend is down as prices are quoting below both moving averages. The 20-day EMA is falling and holds the key for the near-term price movement. If the bears break below the March 18 lows of $7,715, the BTC/USD pair will weaken further, inviting further selling.
On the other hand, if the bulls push prices higher from the current levels, we may see a range develop. The 50-day SMA is flattening rather than falling, which points to a range bound action in a few days’ time.
Important supports to watch on the downside are $7,850, $7,285 and $6,075. On the upside, the resistance levels to look for are $8,912 (the 20-day EMA) and $9,412.41 (the intraday high of March 21).
Though the risk is high, we suggest holding the long positions with the stipulated stop loss. The traders can add to their positions once the cryptocurrency shows signs of bottoming out.
The Relative Strength Index (RSI) readings on Ethereum are in the deeply oversold territory not seen since Dec. 2016. So, should the traders initiate long positions?
No. In a downtrend, the RSI can remain in the oversold territory for a long time. However, traders should watch for a reversal in the price action because an oversold reading shows that the selling has been overdone.
On March 27, the ETH/USD pair broke below the March 18 lows of $452.32. Ideally, the selling should intensify and the cryptocurrency should fall to the next support of $385.
If the markets reject the lower levels and the price starts to move back up, it will be the first indication that a bottom is in place. Once the price rallies above $600, it will indicate a double bottom formation. Therefore, we suggest waiting until Ethereum shows strength.
Bitcoin Cash has retested the March 18 lows of $884.7951, as forecast in our previous analysis. The next support on the downside is a fall to the February 06 lows of $778.2021. If this level breaks, the slide can extend till $600 levels.
Any pullback to the upside will face selling at the 20-day EMA, which has acted as an important resistance on previous occasions.
The flattening 50-day SMA points to a range bound action, but we should suggest a buy on the BCH/USD pair only after we get a confirmation of a bottom formation. We believe that $1,200 is a good level to enter long positions.
Ripple is holding on to the critical support of $0.56270 with the skin of its teeth. The current prices are far away from our recommended buy levels of $0.71. Our stop loss is at $0.52 and the cryptocurrency dipped to a low of $0.55703 on March 27.
If the bears sustain below $0.56720 for three days, a quick slide to $0.22 is possible because there is no major support in between.
The XRP/USD pair will confirm a range bound trading action if it rallies above the $0.72 levels.
Stellar has managed to stay above the March 17 close (UTC) of $0.20263635. This shows lack of selling at the current levels, but we are yet to see stable buying.
The XLM/USD pair will indicate a probable change in trend if it can close above the $0.27 mark. Until then, prices might remain in a tight range.
A break of the $0.2 levels will be a bearish development and can sink prices to $0.1 levels. Therefore, we are not suggesting a long position at the current levels.
The LTC/USD pair now has support at the trendline of the symmetrical triangle at $128. If this support holds, the bulls will make another attempt to pullback towards $187. However, if the support breaks, the cryptocurrency can fall to the February 02 lows of $107.102.
The 50-day SMA has flattened out, which points to possible range bound movement. We will turn bullish when the price breaks out of the 20-day EMA and the downtrend line.
We expect Cardano to remain range bound between 0.00001690 and 0.00002460 for the next few days.
The next leg of the down move will start if the ADA/BTC pair breaks below the supports. Still, it has low chances of happening.
On the upside, if the cryptocurrency breaks out of 0.00002460, it is likely to start a new uptrend. We recommend long positions once the breakout keeps on. The developing positive divergence on the RSI indicates that a rally is in the offing.
Though the bears have broken below the bearish descending triangle pattern on NEO, the bulls are trying to defend the March 18 lows of $49.04.
If the NEO/USD pair breaks below $49.04, it will become negative and can slide to $31.15 levels.
The first sign of strength will be if the bulls push the cryptocurrency above $65 levels and settle there.
EOS has been the strongest one among the top cryptocurrencies. It is trading well above its March 18 lows and is close to the 20-day EMA.
If it breaks out of the descending channel and the 50-day SMA, we believe it will start a new uptrend. Therefore, we recommend a long position on the EOS/USD pair at $7.5. The stop loss can be kept at $5 and the target objective is $11.
Our bullish view will be invalidated if the price declines and stays below $5.
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Author: Rakesh Upadhyay