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The market data is provided by the HitBTC exchange.
Have Bitcoin and the top altcoins bottomed out? We have been maintaining for some time that Bitcoin and a few other cryptocurrencies are in the process of forming a bottom.
Now, several experts are also saying that Bitcoin is likely to rally in the final quarter of this year. If the institutions make an entry, the rally might pick up steam. A few technical indicators are also pointing to a rally in the next few weeks and months.
The head of research at Fundstrat Global Advisors and a crypto bull Tom Lee has a very optimistic target for Ethereum. He predicted that the second largest cryptocurrency by market capitalization will jump more than 700 percent from its current price level by the end of 2018.
Investors, however, should be cautious and only invest the money they can afford to lose, because every analyst gets a call wrong once in a while.
On the side of fundamentals, the news and developments remain strong. Switzerland-based startup SEBA Crypto AG, led by former UBS bankers, has raised about $103 million to set up a bank offering cryptocurrency-related services.
Ukraine’s central bank is planning to launch a state-owned digital currency tied to the national fiat currency at a rate of 1:1. This plan has been in the pipeline for some time now, but still, it will be interesting to see the markets’ reaction if Ukraine launches a government-backed cryptocurrency.
Is the trend for cryptocurrencies about to reverse? Let’s find out.
Note: as a number of cryptocurrencies are showing bottom formations or buy setups, we are recommending them. However, the traders should not jump in and invest all available capital. They should do their own due diligence and only attempt the trades they are confident about. The sentiment is still bearish; hence, caution is warranted.
BTC/USD
Bitcoin has broken out of the moving averages, but is facing resistance at the September 22 intraday high of $6,831.99. The downtrend line of the descending triangle is located just above this level at $6,930. We expect the bears to mount a stiff resistance in this zone.
If the bulls succeed in breaking out of the downtrend line, a move to $7,413.46 is possible. We anticipate a strong bout of short covering if this level is scaled. Therefore, the traders can hold their long positions with the stops at $5,900.
On the downside, the supports are at $6,583.46 and $6,341. If these supports break, a retest of the critical support zone of $5,900–$6,075 is probable.
Currently, both moving averages are flat and the RSI is close to the neutral zone, which suggests consolidation in the short-term. The next directional move on the upside will start after the BTC/USD pair sustains above $6,930.
ETH/USD
The bulls have held on to the $200 level for the past three days, but are struggling to push price above the 20-day EMA. If this resistance is crossed, the next major resistance is the 50-day SMA. Ethereum has not broken out of the 50-day SMA since May 24, hence, this becomes an important level on the upside.
If the ETH/USD pair sustains above the 50-day SMA, a rally to $322 is probable. Aggressive traders can attempt this trade on a breakout above $255.
On the downside, the support levels are $200 and $192.5. The downtrend will resume if the bears break below the September 12 low of $167.32.
XRP/USD
Ripple has been trading between $0.45 and $0.58 for the past few days. A consolidation, after such a stupendous move is to be expected.
The 20-day EMA is sloping up and the RSI is also in the positive territory. This shows that the bulls have an upper hand. Therefore, traders can buy a breakout above $0.583, if it sustains for at least 4 hours. The stop loss can be kept at $0.42. The target objective is a retest of the September 21 high of $0.7644.
If the bears break below $0.42, the XRP/USD pair can slump to $0.35 and below that to $0.26913, completing a 100 percent retracement of the recent rally.
BCH/USD
In the past two days, Bitcoin Cash has rallied sharply, breaking out of both moving averages and the resistance line of the descending channel. This has flattened both the moving averages and has pushed the RSI above 50 levels, which is considered positive. Above $600, the rally can extend to $660.
The bears are currently attempting to push the price back below the moving averages. A break down of the 20-day EMA will indicate weakness and can result in a retest of the recent lows at $408.0182.
The downtrend will resume if the BCH/USD pair breaks down of $408.0182. Traders who are long on our recommendation should keep a stop loss of $400. Partial profits can be booked at $660 and the stops on the rest should be raised to breakeven.
EOS/USD
EOS held the 50-day SMA for the past three days and the bulls have succeeded in pushing the price above $5.65, which is encouraging. The recovery can extend to $6.3117 and above that to $6.8299.
The 20-day EMA is sloping up and the 50-day SMA is flat. The RSI has also entered the positive territory, which suggests that the buyers have the upper hand in the short-term.
Our bullish view will be invalidated if the EOS/USD pair breaks down of $5. Therefore, traders can raise the stops on their long positions to $4.9.
XLM/USD
Stellar is stuck between the downtrend line of the descending triangle and the 20-day EMA. A break out of the overhead resistance zone of $0.275–$0.305 will invalidate the bearish pattern, which is a positive sign.
The upside targets are a move to $0.36, followed by a rally to $0.46. The rising 20-day EMA and the RSI in the positive territory show that the bulls have an advantage in the short-term.
Our bullish view on the XLM/USD pair will be invalidated if the bears sink the price below the 50-day EMA. Therefore, the bulls can hold their long positions with the stop loss at $0.21.
LTC/USD
Though Litecoin is range bound, it is attracting some buying. The price has risen well above the 50-day SMA, which is a positive sign.
The bulls are likely to attempt a break out of the range within the next few days. If successful, the LTC/USD pair will complete a double bottom formation that has a minimum target objective of $89.
The RSI has climbed into the positive zone and the moving averages are on the verge of a bullish crossover, which increases the probability of a break out of the range.
We suggest traders wait for the price to sustain above $69.279 for about four hours and then initiate long positions.
The initial stop loss can be placed just below the September 12 lows, and trailed higher to $54 if the breakout fails to pick up momentum. We are attempting to catch a change in trend, hence, expect some volatility and whipsaws. Please keep the position size at about 50 percent of usual.
ADA/USD
The recovery in Cardano has again hit a roadblock at the 50-day SMA. The bears will now try to break down of the 20-day EMA and push the price to the lower support at $0.071355. A breakdown of this support can result in a retest of the lows at $0.060105.
If the bulls defend $0.071355, the 20-day EMA and the RSI point to a range formation. The ADA/USD pair will attract buyers if the price breaks out of the 50-day SMA and the highs of September 23.
We didn’t find a reliable buy setup at the current levels. Therefore, we are not recommending a long position on the pair.
XMR/USD
Though Monero has held the 20-day EMA for the past four days, it has failed to sustain above $120. This shows selling at higher levels. The bears will now attempt to break below the 20-day EMA and push the price towards the 50-day SMA.
If the XMR/USD pair breaks down of the symmetrical triangle, it can slide to $96.390 and $87.382. Therefore, we suggest traders keep a stop at $100 on their long positions.
Currently, the 20-day EMA is sloping up while the 50-day SMA is flat. The RSI is close to the neutral territory, which points to a range formation in the near-term. The first bullish sign will be a break out of the downtrend line, which can result in a rally to $140.
DASH/USD
Dash has been holding the 50-day SMA for the past three days but is struggling to sustain above the 20-day EMA. It has formed a symmetrical triangle, a break out of which can push the price above the overhead resistance of $224.830.
On the other hand, if the DASH/USD pair breaks down of the triangle, it can decline to $160, followed by a retest of the lows.
Both moving averages have turned flat and the RSI is at the midpoint. This shows a state of equilibrium between the buyers and the sellers. The next move will start when the price breaks out or breaks down of the triangle.
The market data is provided by the HitBTC exchange. The charts for the analysis are provided by TradingView.