Financial regulators across the world finally seem to be warming up to the idea that cryptocurrencies can trade in tandem with stock markets and also in exchange-traded funds (ETF). On Feb. 11, Canada’s Ontario Securities Commission approved the proposal of a Bitcoin ETF by Accelerate Financial, which marks the first approval of a Bitcoin (BTC) ETF in North America.
The Australian Securities and Investments Commission has also softened its stance toward a Bitcoin ETF. ASIC commissioner Cathie Armour said a Bitcoin ETF may get the green light if the particular market has proper rules in place.
The approval of Bitcoin ETFs by several countries will put pressure on the regulators in the U.S. to consider future proposals favorably.
Bitcoin soared above a $900 billion market capitalization today, bringing it within a striking distance of the $1 trillion figure.
The growing popularity of the crypto derivatives market is another added advantage as it shows the asset class has matured. Even in legacy markets, derivatives are one of the key components that are used for the price discovery of an asset.
Let’s analyze the charts of the top-10 cryptocurrencies to determine the trend and spot the critical levels that may signal a trend change.
BTC/USD
During strong uptrends, pullbacks usually last only for one to three days because the bulls buy every minor dip as they expect higher levels in the future. The same was seen in Bitcoin as the price bounced back sharply on Feb. 11.
The psychological level at $50,000 may act as a resistance but if the bulls can drive the price above it, the BTC/USD pair could rally to $60,974.43.
However, the failure of the pair to pick up momentum after making a new all-time high on Feb. 11 and today shows hesitation to buy at higher levels. If the bulls do not resume the up-move in the next few days, short-term traders may book profits.
The pair could then drop to $41,959.63 and the 20-day exponential moving average ($39,895). This is a critical zone to keep an eye on because a break below it will signal that the momentum has weakened.
The bears will be back in the game if the pair slides below the 50-day simple moving average ($35,180).
ETH/USD
Ether (ETH) is currently attempting to break out of the $1,680.173 to $1835.554 tight range it had been stuck in for the past few days. A breakout will suggest that the bulls have overpowered the bears.
The rising moving averages and the relative strength index (RSI) just below the overbought level suggest that the path of least resistance is to the upside. If the bulls can sustain the price above $1,835.554, the ETH/USD pair could move up to the resistance line of the ascending channel.
A breakout of the channel will indicate a pick up in momentum. There is a psychological resistance at $2,000 but if the bulls can push the price above it, the pair may move up to $2,500.
Contrary to this assumption, if the price slips below $1,680.173, the pair may dip to the 20-day EMA ($1,568) and then to the support line of the channel. This is an important support to watch out for because if it cracks, the pair may signal a trend change.
ADA/USD
Cardano (ADA) is currently witnessing a minor correction in a strong uptrend. The shallow pullback shows that traders are not booking profits in a hurry as they expect the uptrend to resume.
The upsloping moving averages and the RSI above 87 suggest the trend remains firmly in favor of the bulls. The first support on the downside is the 38.2% Fibonacci retracement level at $0.7230669.
If the price rebounds off this support, the bulls will again try to resume the uptrend. A breakout and close above $0.9817712 could push the price $1.25 and then to $1.50.
Contrary to this assumption, if the price turns down from the current levels and breaks below the 20-day EMA ($0.593), the ADA/USD pair may signal a possible change in trend.
XRP/USD
XRP rallied to close above the $0.50 overhead resistance on Feb. 11 and the altcoin followed it up with another up-move today. The upsloping 20-day EMA ($0.425) and the RSI in the overbought zone suggest bulls have the upper hand.
The bulls will now try to push the price to $0.65 and then to $0.78068. The bears may mount a stiff resistance at $0.78068 but if the bulls can thrust the price above the overhead resistance, the XRP/USD pair may pick up momentum and rally to $1.
This bullish view will invalidate if the price turns down from the current levels or the overhead resistance and drops below $0.50. Such a move will suggest that traders are dumping their positions on rallies.
DOT/USD
Polkadot (DOT) is in a strong uptrend. The price has currently reached the resistance line of the ascending channel where the bears may mount a stiff resistance. Previously, when the price had reached the resistance line of the channel, the altcoin had entered a minor correction and dropped to the support line of the channel.
However, if the bulls can push and sustain the price above the channel, the momentum may pick up. The first target on the upside is $33 and then $40. The rising moving averages and the RSI in the overbought zone suggest bulls have the upper hand.
This bullish view will invalidate if the DOT/USD pair turns down and breaks below the support line of the channel. Such a move will indicate the start of a deeper correction.
BNB/USD
Binance Coin (BNB) witnessed profit-booking on Feb. 10, but the correction was short-lived as the bears could not even pull the price down to the 38.2% Fibonacci retracement level at $105.7886. A shallow correction after a sharp rally is a positive sign as it suggests that traders are not hurrying to close their position.
The bulls are currently attempting to resume the uptrend by pushing the price above the $148.40 overhead resistance. If they succeed, the BNB/USD pair could start its journey towards $200.
However, the RSI is already above 88 levels, which suggests the rally is overextended. Any rise above $148.40 is likely to push the RSI deeper into the overbought zone, increasing the risk of a melt-up that may be followed by a sharp reversal.
On the contrary, if the price turns down from $148.40, the pair may remain range-bound or enter a meaningful correction.
LTC/USD
Litecoin (LTC) formed a Doji candlestick pattern on Feb. 10 and 11, which showed indecision among the bulls and the bears. If the bulls can push and sustain the price above $185.5821, a rally to $200 is possible.
The gradually upsloping moving averages and the RSI near the overbought zone suggest the path of least resistance is to the upside.
Contrary to this assumption, if the price again fails to sustain above $185.5821, it will suggest that demand dries up at higher levels. The LTC/USD pair could then drop to the 20-day EMA ($158).
If the price rebounds off this support, it will indicate that bulls are buying the dips. They will then again try to propel the price above the overhead resistance and resume the uptrend.
On the other hand, if the price turns down and breaks below the moving averages, a drop to $120 is possible.
LINK/USD
After sustaining above $25.7824 for the past three days, Chainlink (LINK) has resumed its uptrend today. The price has currently reached the resistance line of the rising wedge pattern, which may attract selling from the bears.
But if the bulls can push the price above the rising wedge pattern, the LINK/USD pair could pick up momentum and rally to $33 and then $36.
On the contrary, if the price turns down from the current levels, the pair may drop to the $25.7824 support. A break below the support line of the wedge will complete the bearish setup and open the doors for a fall to $20.1111.
XLM/USD
Stellar Lumens (XLM) is in an uptrend. The rising moving averages and the RSI in the overbought zone suggest the bulls have the upper hand. However, the altcoin could face resistance at the $0.50 psychological level.
If the price turns down from the overhead resistance, the XLM/USD pair could drop to $0.409 and then to the 20-day EMA ($0.36). A strong bounce off this support will suggest accumulation at lower levels.
The bulls will then once again try to resume the uptrend by pushing the price above $0.50. If they succeed, the uptrend could pick up momentum and reach $0.58. Conversely, a break below $0.35 could suggest a deeper correction to the 50-day SMA ($0.27).
BCH/USD
The bulls are attempting to sustain Bitcoin Cash (BCH) above the $539 overhead resistance. If they succeed, the altcoin could rally to $631.71 and if this level is also scaled, the up-move may reach $745.
The upsloping moving averages and the RSI above 65 suggest the path of least resistance is to the upside.
Contrary to this assumption, if the price turns down from the current levels, it will suggest the bears are aggressively defending $539. A break below the moving averages could keep the price stuck inside the $539 to $370 range for a few more days.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Market data is provided by HitBTC exchange.