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While China banned initial coin offering (ICO) back in September 2017, it has not prevented the Chinese social network Renren from seeking an ICO. The company’s stock, which is listed on the New York Stock Exchange climbed 47.39 percent to $18.32 a share following the news.
Similarly, Israeli trading company Plus500 saw its stock price spike 20 percent as it reported that cryptocurrency trading had boosted its profits.
This shows that the markets are excited about the companies getting involved with the Blockchain technology or cryptocurrencies.
But not regulators, apparently. The Israel Securities Authority, for example, is not in favor of stocks, whose main business is linked to cryptocurrencies. The regulator plans to prohibit the listing of shares of such companies. Will other stock markets regulators also follow? Difficult to say.
As the cryptocurrencies market cap has crossed over the $760 bln point with altcoins outperforming Bitcoin, let’s see if we can identify any buy or sell patterns today.
BTC/USD
Though Bitcoin broke out of the downtrend line, it did not reach our expected target objective of $16,000. Failure of the bulls to capitalize on the breakout of the downtrend line is a bearish sign.
We find a symmetrical triangle developing, which is a continuation pattern. The cryptocurrency is currently retesting the breakout levels of the triangle. If it holds the $14,000 levels and reverses direction, we suggest long positions above $15,500.
If the BTC/USD pair falls below $14,000, it is likely to fall to the neckline and below that to the trendline of the triangle. A breakdown of $12,000 levels will be negative, which can extend the fall to $8,000 levels.
Therefore, traders should keep a stop loss around $13,500 once their long positions are triggered. Also, avoid buying below the specified levels.
ETH/USD
We expected a move to $973, once Ethereum sustained above $863 and it has reached our target objective today.
The resistance line of the channel is likely to act as strong resistance. Based on the previous experience, we find that once the cryptocurrencies are in a momentum, they overshoot their target objectives.
Therefore, traders can book partial profits at the resistance line and hold the rest with a close stop-loss because if the ETH/USD pair breaks out of the ascending channel, it can rally to $1,200 levels.
However, the markets can turn down in a jiffy, so make sure to trail the stops higher instead of being fixated on the targets.
BCH/USD
Though Bitcoin Cash broke out of $2,475, it could not reach $2,900 levels, as we had expected. It turned back from $2,770.6933.
The cryptocurrency has again fallen to the critical trendline support, which has provided support on two previous occasions. If this level breaks, there is marginal support at the $2,072.6853 point; below that a fall to $1,733.3558 is likely.
If the trendline support holds, we may see another attempt by the bulls to push the BCH/USD pair higher. The pair is likely to gain momentum above $2,800 levels.
XRP/USD
Ripple did not waste any time in consolidation, as we had anticipated. It just broke out to new lifetime highs yesterday and has continued higher.
With this rally, the pair has risen from a low of $0.22255 on December 11 to a high of $3.317 today. That is a 1,390 percent rally within a month.
It is difficult to project a target when an asset class is backed by such a strong momentum. However, as a reference, the next target on the XRP/USD pair is $3.414 and above it $3.90469. Nevertheless, even at the risk of missing out on a further rally, we believe that the traders should book about 50% profits at the current levels and hold the rest with a close stop loss.
The cryptocurrency is clearly overbought and is due for a correction or a consolidation shortly.
IOTA/USD
We have recommended long positions on IOTA in our two previous analyses. We expect the bulls to attempt a rally towards the upper end of the range at $5.59.
The bears are defending the overhead resistance of $4.34. Currently, the IOTA/USD pair is taking support at the 20-day EMA.
If this level breaks, it is likely to retest the lows at $3.03 levels. The cryptocurrency pair will gain momentum only above $4.34 levels.
Since IOTA is still inside the range, we recommend holding to the long position with a stop loss of $2.85. We shall reconsider our position in a couple of days.
LTC/USD
The pullback in Litecoin could not sustain above the $250 levels. The cryptocurrency has again broken below the neckline of the bearish head and shoulders pattern.
It has again broken below the 20-day EMA, which has flattened out. Still, we find buying on dips, closer to the $200 levels.
The LTC/USD pair has support at $195.417, below that at $179.7308 from the 50-day SMA, and finally at $175.199, which is the lows formed on December 22.
If the cryptocurrency pair doesn’t break out of $260 within a couple of days, we expect it to resume its slide towards the lower targets.
XEM/USD
NEM has climbed from a low of $0.23595 on December 08 to a high of $2.06278 today, which is a 774 percent rally within a month. It has climbed to the sixth position in terms of market capitalization. Hence, we included it in our analysis.
The XEM/USD pair has risen vertically over the past three days. It has a target objective of $2.13774, which is a critical Fibonacci extension level. We expect some resistance at this overhead resistance. Therefore, traders should keep a close stop-loss on their position.
It does not necessarily mean that the cryptocurrency will crash from $2.13774 levels. It can consolidate for a few days and then again resume its uptrend.
In a correction, we expect support at $1.57849 and $1.42889, which are 38.2 percent and 50 percent Fibonacci retracement levels of the recent leg of the up move from $0.794 to $2.06278.
ADA/BTC
As we don’t have the charts with enough data available for ADA/USD, we are analyzing the ADA/BTC pair.
We expected Cardano to correct in our previous analysis; however, it extended its rally in the past two days and proved us wrong.
From a low of 0.00000338 on Nov. 25 to a high of 0.00009180, today, the ADA/BTC pair has risen 2,615 percent in one and half months. This shows that it is in a strong momentum.
Though momentum can carry it higher, the rally is overextended and is likely to enter into a consolidation or correction soon. Therefore, traders should book partial profits on every rise and should keep a close stop loss on their remaining position.
It is difficult to call a top, but the risk to reward is skewed to the downside.
The market data is provided by TradingView.