In December 2017, the market participants were eagerly waiting for the total crypto market capitalization to touch $1 trillion. Fast forward to December 2018, and the total market capitalization is struggling to hold on to the $100 billion mark.
This shows the complete change in sentiment in the past one year: last year, it was fear of missing out and this year it is fear of losing all the money invested in cryptocurrencies.
During extremes of the bull or the bear phase, the markets overshoot and undershoot the technical targets by a large margin. We believe that the decline has reached a panic state, which will end with a bottom formation, sooner than later.
Therefore, investors who believe in the long-term potential of the asset class should be ready to invest once the decline ends. The downside risk from the current levels is limited while the upside potential is attractive.
EOS/USD
EOS (EOS) block producers are operating in negative margins and many will land up in trouble if the price does not recover or if no change is made to the existing reward system.
Hackers are also having a field day with the decentralized apps (DApps) that are based on the EOS blockchain. Their hacks have resulted in a loss of about $1 million since July.
Charles Hoskinson of Cardano believes that the United States Securities and Exchange Commission (SEC) is likely to train its guns against the $4 billion initial coin offering (ICO) of EOS. So, how does the future look according to the charts? Let’s find out.
The major trend on the EOS/USD pair is down. The price has been making new year-to-date lows since the breaking down of $4.493.
The bulls had attempted to form a base from mid-August to mid-November, which failed. The pattern target of that break was $2.1561. However, the bears easily broke through this level and plunged the digital currency to a low of $1.55. Even at these levels, there is no urgency among the buyers to step in and provide support.
This suggests that the decline can extend to the next support at $1.2 and below it to $1, which is a major psychological support. The RSI is close to the oversold territory, which shows that the selling has been overdone.
A pullback to the breakdown level is likely, which in this case is the $3.8723–$4.493 zone. However, traders should initiate long positions only after the virtual currency signals a trend reversal. Until then, it is best to remain on the sidelines.
BNB/USD
Binance, one of the top crypto exchanges in the world by trade volume, has launched educational content to provide “unbiased” information about crypto and blockchain to the public. The development of the content is being undertaken by Binance Academy, which is the dedicated education arm of the exchange.
Another arm, Binance Labs, has released its first batch of blockchain projects from its incubation program, which provided the projects with funding and other necessary resources. The exchange has added six new pairs, with Circle’s USD-pegged stablecoin USD Coin recently being included in its Combined Stablecoin Market.
The Binance Coin (BNB/USD) pair is relatively strong, as it has not given up much ground since the breaking down of the year-to-date low of $5.4666, formed on Feb. 6. It is currently falling inside a descending channel.
If the bears break below the immediate support of $4.1723848, the decline can reach the support line of the channel at $2.5.
Though the trend is down and it is advantage bears, the RSI is in the oversold territory, hence, we can expect the bulls to attempt to climb back above the overhead resistance at $5.4666. If successful, the current dip can be termed as a bear trap and the pullback can extend to the resistance line of the channel, just above $7.5. Traders should attempt a trade only after a reliable buy setup is formed.
TRX/USD
TRON (TRX) launched its TRC20 exchange this week. With the exchange going live, it is expected that the liquidity of the TRON network will increase. The 24-hour transaction amount for DApps increased 48 percent compared to the previous week. Similarly, the 24-hour trading volume increased 151 percent over the last week. With these developments, how does the chart pattern look? Is a bottom in sight?
The bulls have been attempting to put a bottom in place for the past few months. The TRX/USD pair consolidated between $0.0183 and $0.0281551 for about three months, before breaking down on Nov. 19. An attempt to climb back into the range failed and the bears are attempting to extend the downtrend. The breakdown gives it a pattern target of $0.00844479. If the decline doesn’t stall at this level, then the next support is at $0.00554133.
However, if the bulls defend $0.01089965 and push the price back above $0.0183, the digital currency will indicate a probable trend change. Until then, every pullback will be met with a wave of selling, hence, it is better to wait and watch.
LTC/USD
The Litecoin (LTC) Lightning Network is ready for launch on one of the largest payment gateways, CoinGate. The creator of Litecoin, Charlie Lee, cheered the news in a recent tweet, “Even Litecoin will soon have more than 1000 merchants accepting LN payments! Thanks @CoinGatecom!”
Lee had sold all of his Litecoin in December 2017, citing a conflict of interest. He had then indirectly indicated that the price of Litecoin could plunge to $20. With the price declining close to his prediction, will it find a bottom at these levels or will it continue to slump? Let’s find out.
The LTC/USD pair has been in a strong downtrend since peaking out at $370 in December of last year. Though there was an attempt to form a base at $47.246, the bears broke down on Nov. 13 and resumed the downtrend. There was another attempt to defend the support at $29.349, but it did not hold even for a week.
Currently, the downtrend has resumed and the next support on the downside is the $19–$21 zone. If this also fails to hold, the fall can extend to $15. The RSI has reached oversold levels, last seen in the beginning of 2015.
If the digital currency rebounds from current levels and climbs above $29.349, it will indicate that the markets have rejected lower levels. In such a case, a pullback to $47.246 is probable. However, as the bears have an upper hand, the traders should wait for the trend to reverse before attempting a long position in it.
BTC/USD
Some believe that after the crushing bear market Bitcoin (BTC) will meet its end. However, Jeremy Allaire, co-founder of Circle, believes that Bitcoin will be worth “a great deal more” than it is now in the next three years.
Co-founder of Fundstrat Global Advisors, Thomas Lee, believes that the fair value of Bitcoin is between $13,800 and $14,800, a good 315 percent higher than the current levels. During bear markets, prices can drop to crazy levels, which turns out to be a good buying opportunity for the brave hearted who can go against the trend.
The trend in the BTC/USD pair is clearly down. Since breaking down of the critical $5,900 support, the bulls haven’t been able to defend any intermediate support levels, which shows that the bears are in command.
The selling has pushed the RSI into the oversold territory, a level last seen in the beginning of 2015. The immediate support is at $2,974, from where we anticipate a strong bounce.
Conversely, if the virtual currency fails to recover, the downtrend can extend to $1,752. With every fall, the pair gets closer to the bottom, but it is difficult to predict where the decline will end.
As the slide has been sharp, the next pullback is likely to be equally sharp. Therefore, traders can expect a retest of the breakdown level of $5,900 once the trend reverses. Until then, the short traders will pounce on every small pullback.