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The market data is provided by the HitBTC exchange.
A prominent economist, author of “When Markets Collide,” and “The Only Game in Town” Mohamed El-Erian thinks cryptocurrency is the future and that it will be government-backed.
We believe that most top digital currencies will survive this bear market and the traders should view the current fall as a buying opportunity instead of fearing it.
Sygnia Asset Management, a major South African investment firm with $14.5 billion under management, is launching a cryptocurrency exchange in late 2018. It will also create a fund to invest in digital currencies on behalf of its clients.
So, should we also start investing at the current levels or wait a little more? Let’s find out.
BTC/USD
We are clear that Bitcoin can be purchased on dips because it offers a great risk to reward ratio if purchased anywhere between $6,075 to $7,000. We believe that it is in consolidation, as long as it stays above $6,075. A break of this level will be negative and will attract further selling.
We had recommended buying the leading cryptocurrency on a sharp fall below $7,000 in our previous analysis, but the bulls held on to the $7,100 levels on May 28 and May 29.
The current rebound will face resistance at the downtrend line and above that at the 20-day EMA, which is at $7,963.
The BTC/USD pair has given a tradeable bounce from close to the 30 levels on the RSI for the past year and a half. Until proven otherwise, we believe that this trend will continue.
The next dip from the overhead resistances will offer us a buying opportunity. It is advisable to watch for a couple of days before initiating a long position.
ETH/USD
Ethereum broke below the support line of the descending channel on May 28, but the bears could not follow up on their selling at lower levels. As a result, the digital currency rebounded sharply on the very next day, erasing all the losses.
The rebound will face selling at higher levels as the 20-day EMA has turned down and has completed a bearish crossover.
The next dip will give us a better idea whether the decline has ended at $492.5 on May 28 or will it extend to $464.65 levels.
Once we get a confirmation of a bottom, we shall recommend long positions on the ETH/USD pair. Currently, we don’t find any trade on it.
XRP/USD
Ripple has formed a large descending triangle pattern. It broke below the critical $0.56270 support on May 28 but rebounded on the next day. It is currently facing resistance at the 20-day EMA, which has turned down.
If the next dip holds above $0.54, the traders can wait for a break out above the 20-day EMA to go long. The minimum upside target objective of such a trade is a move back to $0.8. We can expect a rally to $1.2 if the XRP/USD pair breaks out of the downtrend line of the descending triangle.
If the $0.54 level breaks, a fall to $0.45 is likely. This is the last support, below which the digital currency can sink to $0.24.
BCH/USD
We believe that Bitcoin Cash is trading in a range whose resistance is at $1,600. The support of the range is still undecided. It can either be $750 or closer to $620.
Currently, the cryptocurrency is struggling to sustain above the downtrend line. If the bears succeed in breaking below the May 28 lows of $878, a slide to $750 is probable. This should offer some support, but if this also breaks, the next support is at $620.
If the $878 level holds, the BCH/USD pair can remain range bound for a few days. We don’t find any reliable buy setups at the current levels; hence, we are not recommending any trade on it.
EOS/USD
We had proposed a buy at $14.25 on EOS, but it turned down from $12.98 on May 28. The 20-day EMA is currently acting as strong resistance.
The EOS/USD pair can remain range bound between $10.3384-$12.9870 for the next few days, before breaking out or breaking down from it.
We don’t find any buy setup as long as prices remain inside the range. If the virtual currency breaks down of the range, it will become very negative, hence, we suggest waiting for the break out to close (UTC) above $12.98 to form any long positions.
LTC/USD
Litecoin has held the $107 support levels once again, but it is facing resistance at the downtrend line. Even if this level is crossed, it will face resistance at the 20-day EMA at $129.
We shall consider a buy only after the LTC/USD pair sustains above $129 for a couple of days.
On the downside, if the $107 level breaks, it will signal the completion of a descending triangle pattern. Though its pattern targets are way lower, the digital currency can slide to $84 and below that to $75.
ADA/USD
Cardano is showing buying at lower levels. It has broken out of the descending channel and is moving towards the overhead resistance at $0.23. If the bulls break out of this, the cryptocurrency will gain strength and pick up momentum on crossing above $0.3.
We like the way the ADA/USD pair bounced from the oversold levels on the RSI. This shows that bulls are willing to enter at lower levels.
We recommend a long position on a breakout and close (UTC) above $0.23 with the stops below $0.17. Our bullish view will be invalidated if the digital currency fails to break out of $0.23 and turns down, breaking below $0.17.
XLM/USD
The wedge pattern did not give us a clear breakout or a breakdown. Hence, we have removed it today. Stellar pulled back sharply from 0.2428 levels on May 29 but is facing selling close to $0.30 levels.
If the bulls can scale above the $0.303 levels, it will indicate the start of a rally to $0.385. Therefore, traders should wait for the breakout and close (UTC) above $0.303 before initiating any long positions.
If the XLM/USD pair fails to hold the current levels and breaks down to $0.24, it can slide to the next lower support at $0.184.
IOTA/USD
After a sharp pullback on May 29, IOTA has climbed to the ninth spot, that’s why it’s way back in our analysis. It continues to consolidate between $0.9150-$2.2117.
Currently, the price is close to the overhead resistance at $1.63. The 20-day EMA is also just above it. We believe that the bulls will find it difficult to break out of these two resistances.
We anticipate a retest of the recent lows of $1.33 in a couple of days. If the lows hold, the traders can buy a breakout and close above $1.63 with a target of $2.2.
If the lows break, the IOTA/USD pair will decline to the bottom of the range at $1. Therefore, we suggest buying only after the lows are successfully held in the next retest.
The market data is provided by the HitBTC exchange. The charts for the analysis are provided by TradingView.