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The market data is provided by the HitBTC exchange.
Most large businesses have been quick to realize the vast potential of the blockchain technology and are moving towards adopting it. Now, even the United States are catching up. New York state is planning to establish a task force to study the implications of digital currencies on the financial markets in New York.
A few countries like Norway and Switzerland are toying with the idea of launching their own digital currency. Estonia had plans to establish a national cryptocurrency, Estcoin but had to shelve its proposal following an objection from the European Central Bank.
While the launch of a US-based crypto ETF is still a distant dream, Huobi, the third largest crypto exchange in the world by trade volume has launched an ETF, based on its market index. The world’s largest crypto exchange, Binance, also announced plans to launch a $1 billion fund to invest in crypto startups.
We believe that the globe is moving towards a greater adoption of cryptocurrencies, which should fuel the next leg of the rally. We want to take advantage of the current fall in the crypto markets to establish positions, however, we are waiting for the opportune time to invest. Let’s see if we can locate any buy setups today.
BTC/USD
Bitcoin rallied close to the 20-day EMA but could not break out of it. If it doesn’t stop at the current levels, it can fall to $7300 and below that it will retest $7100.
The 20-day EMA acts as a resistance in a downtrend and acts as a support in an uptrend. Therefore, until the BTC/USD pair breaks out of the 20-day EMA, it will remain negative and susceptible to selling pressure on any rally.
The traders should wait for a dip below $7,000 or a breakout above the 20-day EMA to establish long positions. We don’t find any buy setups at the current levels; hence, we suggest traders to remain on the sidelines.
ETH/USD
Ethereum is trading inside the descending channel, making lower lows and lower highs. The trend will change when the digital currency breaks this streak and makes a higher high and a higher low.
From the support line of the channel on May 28, the digital currency rallied to the resistance line of the channel on June 03 but the bulls could not break out of the channel; hence, prices have again turned down today.
If the next dip doesn’t break below the intraday low of May 28, it will be a positive sign. We suggest traders to wait for the ETH/USD pair to break out and close (UTC time frame) above the descending channel before initiating any long positions.
Conversely, if the digital currency breaks below $492.5, it can again decline to the support line of the channel, close to $464. We didn’t find any buy setups at the current levels.
XRP/USD
Ripple bounced off the critical support at $0.56270 and scaled above the 20-day EMA but could not break out of the 50-day SMA. It continues to trade inside a descending triangle, which is a bearish sign. A break below the $0.54 level can extend the fall to $0.45.
The first sign of strength will be when the XRP/USD pair breaks out of the $0.83 levels. Both moving averages are flattening out, which points to a range-bound action, rather than a trending move.
We shall wait for a couple of days before suggesting any trade on it.
BCH/USD
We were expecting Bitcoin Cash to trade in a small range but we were proven wrong as it rallied for the past two days and came close to the 50-day SMA.
The BCH/USD pair is turning down from just above $1,200 levels. It can take support at the 20-day EMA or at the $1000 levels.
If either of the supports hold, the bulls will again attempt to break out of the 50-day SMA and rally to $1,400 levels.
We shall wait for the virtual currency to find some support before suggesting any trades.
EOS/USD
EOS spiked after its EOSIO 1.0 launch and came close to its first target objective of $15.6356, specified in our previous analysis. However, we have not recommended any positions because we don’t trade during major events due to the high level of uncertainty.
The EOS/USD pair is witnessing profit taking at higher levels and is likely to retest the breakout levels at $12.9870. The 20-day EMA is also located just above this level.
If the level holds, the bulls will try to resume the up move towards $18.67 levels once again but if the support breaks, the digital currency will re-enter the range and can slump back to $10.3384 levels.
We shall wait for more clarity to emerge before recommending any trade on it.
LTC/USD
Litecoin has turned down from the $127 levels, which is a major resistance. Its downside support is at $115.447, which is the intraday low of May 30. If this level breaks, a slide to $107.102 is possible.
However, if the level holds, the bulls will again attempt to break out of the overhead resistance.
If the LTC/USD pair breaks out of $127, it can rally to the downtrend line of the descending triangle, close to $150. Therefore, we recommend a long position on a close (UTC time frame) above $127 with a close stop loss.
We recommend to keep the allocation size less than 50 percent of usual for this trade because the digital currency is still trading inside a bearish pattern. The negative setup will be invalidated if the bulls break out of $160.
ADA/USD
For the past two days, Cardano broke above the $0.23 levels on an intraday basis but could not close (UTC time frame) above it. Hence, our buy recommendation suggested in the previous analysis did not trigger.
Currently, the ADA/USD pair has turned down. It has a strong support at the $0.17 levels. If this level breaks, a slide to the bottom of the large range at $0.13 is possible.
Nonetheless, if the bulls stem the current weakness and cause a turnaround, a break out of the $0.23 levels should be positive. The 50-day SMA might act as a minor resistance but we expect this level to be crossed.
Hence, we retain our buy recommendation provided in the previous analysis.
XLM/USD
Stellar closed (UTC time frame) above the 20-day EMA by a small margin on June 03, triggering our buy suggestion provided in the previous analysis.
The bulls failed to build on the gains above the 20-day EMA resulting in a decline below the moving average and the horizontal line today.
The 20-day EMA is flat and the 50-day SMA is also turning flat. This increases the probability of a range formation in the near term.
We shall watch for a couple of days and close the position if the XLM/USD pair doesn’t rise above $0.32.
On the downside, support is at $0.242 and below that at the $0.184 levels.
IOTA/USD
IOTA broke out of the 50-day SMA on June 03 but could not sustain the higher levels. It turned down from just above $2 levels and is currently taking support at the 20-day EMA. A break of this can extend the decline to $1.63, which is a strong support.
If the bulls successfully defend the $1.63 levels for a couple of days, the traders can consider it as a buying opportunity with the stops below the $1.3 levels.
Long positions should be avoided if the IOTA/USD pair breaks down of $1.63 because the next support on the downside is at $1.33 and below that at the bottom of the range at $0.9150.
The market data is provided by the HitBTC exchange. The charts for the analysis are provided by TradingView.