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The market data is provided by the HitBTC exchange.
Google Trends shows that web searches for the word “Bitcoin” have plunged about 75 percent in 2018 so far. This shows that most people looking to make a quick buck have lost interest in the cryptocurrency. While this is bad news for momentum traders, it is good news for investors because they can buy at lower levels when most of the froth is out of the markets.
While Apple co-founder Steve Wozniak believes that Bitcoin is digital gold, the famous short seller Jim Chanos, is not fond of cryptocurrencies and doesn’t see any use for them in case of an apocalypse.
Any new disruptive technology always has its share of skeptics. Interestingly, Bitcoin has been “sent to the graveyard” 300 times already but still, it has always emerged stronger than before and this time is going to be no exception.
The central banks around the globe are threatened by the virtual currencies. During a recent panel talk, the representatives of the Bank of Canada and the Swiss National Bank agreed that cryptocurrencies can spell the end of fiat currencies in a “situation of hyperinflation” and if the central banks don’t do a good job.
So, should we buy some now or wait for better prices later. Let’s see.
BTC/USD
Bitcoin turned down from close to the 20-day EMA on June 04 but found support at $7433.34 on June 05. Today, the bears are again defending the overhead resistance zone between the 20-day EMA and $7941.68.
The BTC/USD pair will gain strength above the $7941.68 levels. On the upside, the target objectives are $8,500, $9,000 and $10,000.
On the downside, it has supports at $7317.6, $7106 and $6750.
The 50-day SMA has flattened out and the 20-day EMA is falling, which shows that the path of least resistance is on the downside. The failure of the RSI to rise above the 50 levels also adds to the negative sentiment.
We shall turn bullish after price rises above the 20-day EMA. Until then, we suggest traders to remain on the sidelines.
ETH/USD
Ethereum has been trading near the resistance line of the descending channel for the past three days. It has not given up any ground, which increases the likelihood of a breakout of the channel.
The traders can buy once price reaches $630, with a stop below $570. The target objective of this trade is a rally to $745. There is a minor resistance at the 50-day SMA but we expect it to be crossed.
On the downside, the ETH/USD pair will find support at the trendline but if it re-enters into the channel, it can again slide to the support line of the channel. Hence, we suggest a long position only when the price is clear of the channel.
XRP/USD
Ripple is taking support at the 20-day EMA but has not shown a strong bounce. The flattening of both moving averages points to the possibility of a consolidation in the near term.
The XRP/USD pair will turn positive if it breaks out of the downtrend line of the descending triangle and will turn negative if it breaks below $0.45.
We didn’t find any buy setups at the current levels.
BCH/USD
Bitcoin Cash has been sustaining above the 20-day EMA for the past three days, which is a positive sign. The 20-day EMA which had been trending down has flattened, whereas, the 50-day SMA continues to trend up. All these indicate that the path of least resistance is up.
Historically, the 50-day SMA has not acted as a major resistance, hence, we don’t expect a major hurdle at this level. However, $1306.5585 might act as a resistance. Above this, a retest of the $1600 levels is likely.
On the downside, $1060-$955 is the first support zone. The BCH/USD pair will become negative if it drops below $878.
Though we are bullish, we didn’t find any reliable setups; hence, we are not suggesting any trade on it.
EOS/USD
EOS has held the support at $12.9870, which is a bullish sign. It is currently facing resistance at the 50-day SMA. Both moving averages are turning up, which indicates that the path of least resistance is on the upside.
Traders can wait for the EOS/USD pair to trade above the 50-day SMA for four hours and then initiate long positions with a target objective of $18.67. The stops can be kept close to $12.5 levels. If the digital currency struggles to break out of $15.545, the long positions should be closed.
Volatility may remain high in the short-term because the virtual currency has just completed a major event. Hence, we suggest keeping the position size at less than 40 percent of usual. This is a high-risk trade.
LTC/USD
Litecoin has been consolidating in a tight range of $115-$127 for the past seven days. It might pick up momentum once it breaks out of $127. The first target objective on the upside is a move to $140, close to the 50-day SMA. If this level is crossed, the rally can extend to the downtrend line of the descending triangle.
If the LTC/USD pair fails to break out of $127, it will continue its range-bound trading action for a few more days.
On the downside, it has strong support at $115, and below that at $107 levels. It will become very negative if it breaks down and sustains below $107.
We propose a long position on a breakout above $127, with a close stop loss of $115. We recommend to keep the allocation size at only 50 percent of usual because the digital currency is still trading inside a bearish descending triangle pattern.
ADA/USD
Cardano has been trading near the $0.23 levels for the past three days but has not triggered our recommendation to buy on a close (UTC time frame) above $0.23.
The moving averages have flattened out, which points to a range-bound action in the short-term.
Even if the $0.23 level is crossed, the ADA/USD pair might again face resistance at $0.263 and $0.286 levels. On the downside, the support is at $0.17 levels.
As the risk-to-reward ratio is not attractive, we shall withdraw our buy recommendation and wait for a better opportunity.
XLM/USD
Stellar is struggling to rally above the $0.303 levels. However, the only small positive is that it has not given up much ground after returning from the 20-day EMA on June 04.
We suggest to hold the long positions that triggered on June 03 but the stops should be trailed higher to just under $0.27 because the 50-day SMA is flat and the 20-day EMA is turning down, which is a bearish indication. Hence, let’s reduce our risk.
If the XLM/USD pair breaks out and closes above $0.303, it should move up to the 50-day SMA at $0.346 and above that to $0.38 levels.
IOTA/USD
Though IOTA has held above the critical support at $1.63 for the past two days, it is struggling to stay above the 20-day EMA, which shows lack of buying support at the current levels.
Both moving averages have turned flat, which increases the possibility of a consolidation in the IOTA/USD pair.
The trend will turn negative only if the $1.63 support breaks down. On the upside, a bounce can reach $2 and $2.2 levels.
Traders should establish a long position only after a strong bounce from the key support at $1.63.
The market data is provided by the HitBTC exchange. The charts for the analysis are provided by TradingView.