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Market data is provided by the HitBTC exchange.
A new study by digital asset management fund Grayscale Investments shows that 83% of American investors are likely to invest in Bitcoin. Another interesting finding was that the average age of Bitcoin investors was 42. This means that even traditional investors are allocating some portion of their portfolio to cryptocurrencies. As the markets mature, we expect cryptocurrencies to occupy a larger portion of portfolios.
One thing that can make cryptocurrencies more attractive is the incessant money printing by most of the central banks around the world. Morgan Creek Digital Assets co-founder Anthony Pompliano believes that if the European Central Bank cuts rates, it might work as “rocket fuel” for Bitcoin. Pantera Capital founder Dan Morehead expects Bitcoin to reach $42,000 by the end of this year and $356,000 within a couple of years.
However, not everyone is bullish on cryptocurrencies. United States Treasury Secretary Steven Mnuchin opines that he is unlikely to talk about Bitcoin in another 10 years and he is not going to buy Bitcoin either. While we remain bullish for the long term, we depend on the charts to provide us an insight for the short term. So, let’s look at the charts and see if we spot any buy setups.
Buying in a downtrend or during uncertainty can result in huge losses. Therefore, patience is key for traders who want to be in the game for the long term and be profitable. Bitcoin (BTC)
is currently hovering above the important support zone of $9,727.55 to $9,080.
It is very difficult to predict whether the price will bounce from here or correct. The 20-day EMA, which shows the short-term trend, has started to turn down and the RSI has been trading below 50 for the past few days. The moving averages are on the verge of a bearish crossover. These indications suggest that bears have the upper hand in the short term.
Nevertheless, the 50-day SMA is still sloping up, which shows that the medium-term trend is up. When the long and medium-term trend is up, dips should be used as a buying opportunity. Therefore, we are waiting for a bottom to be formed before recommending a long position.
The next few days will confirm whether the BTC/USD pair bottoms out at the current levels or at the next support zone of $7,451.63-$6,933.90. On the upside, we anticipate the pair to pick up momentum after it breaks out of the downtrend line of the descending triangle.
The bulls have managed to keep Ether (ETH) above the uptrend line, but are unable to carry it above 20-day EMA. This shows hesitation among buyers at higher levels. If the price does not bounce sharply within the next few days, the uptrend line might break down.
If the ETH/USD pair slides below the uptrend line and the recent low of $192.945, it can quickly drop to $150. The 20-day EMA is sloping down and the RSI is in the negative zone, which suggests that the bears have the upper hand.
But if the pair bounces off the current levels and rises above the 20-day EMA, it can move up to $320.840. It will face resistance at the 50-day SMA, but we expect it to be crossed. We will wait for the price to sustain above the 20-day EMA before recommending a trade in it.
XRP is not generating any interest from buyers. The sellers are also not attempting to break down of the critical support at $0.27795. This might result in a consolidation around the current levels for a few days.
If the price remains below the 20-day EMA, bears are likely to attempt to breakdown of $0.27795 again. If this critical support breaks down, the XRP/USD pair can enter a downtrend, which will be a huge negative.
However, if the price breaks out of 20-day EMA, it can move up to 50-day SMA. Above the 50-day SMA, a rally to $0.45 is possible. Long-term investors can buy at the current levels and keep a stop loss below $0.2750. This gives them an attractive risk to reward ratio. Nonetheless, swing traders should wait and buy only when the price starts to move up.
Volatility in Litecoin (LTC) has shrunk. This suggests a balance between buyers and sellers. Both parties are playing it safe and are not trying to assert their supremacy. We find that the digital currency regularly enters such periods of low volatility (marked as ellipses on the chart), which ends with a decisive move.
If the price enters a tight range, traders should wait until the BTC/USD pair makes a strong directional move. If volatility expands to the downside, the pair will resume the downtrend and can plummet to $58. Nonetheless, if the breakout happens to the upside and the price scales above the 20-day EMA, a relief rally to the 50-day SMA is likely. We are currently neutral on the cryptocurrency.
Bitcoin Cash (BCH) is currently at the resistance line of the descending channel. A breakout from it will signal a change in trend. We anticipate the digital currency to trade between $251.23 and $345.80 for a few days. A breakout of the range can carry the price to $428 and above it to $500.
Contrary to our assumption, if the BCH/USD pair turns down from the current levels, it can drop to the support at $251.23. If this support cracks, the next critical level to watch on the downside is $227.70. As the trend is still down, we will wait for the price to break out of $345.90 before suggesting a long position in it.
The bulls are attempting to keep Binance Coin (BNB) above the uptrend line while bears are trying to break down of it. We should soon have a clear winner. If the bears win the tussle, the price can drop to $24.1709. If this support also gives way, the correction can deepen to $18.30.
On the other hand, if the BNB/USD pair rebounds sharply from the uptrend line and rallies above the 50-day EMA, a retest of the highs at $39.5941 is probable. As the pair was the strongest altcoin in the recent recovery, we remain bullish on it. Nevertheless, we will wait for a confirmation of a bottom before proposing a trade in it.
EOS broke out of the channel on July 24 and has been trading near the 20-day EMA since then. This is a positive sign as it indicates a change in trend. The 20-day EMA is flattening out, which shows balance between bulls and bears.
A breakout and close (UTC time frame) above the 20-day EMA will increase the probability of a move to the 50-day SMA, which might offer a stiff resistance. Once it is scaled, the price can move up to $7.50. Therefore, traders can buy on a close above the 20-day EMA and keep a stop loss of $3.70.
Conversely, if the price reverses direction from the 20-day EMA, it can again fall to $3.8723. A breakdown of this level will be negative.
Bitcoin SV (BSV) looks strong as it has held a large portion of the gains from the recent lows of $107. This shows that traders are not in a hurry to book profits. The price has been hovering around the 20-day EMA for the past five days.
If bulls push the price above the resistance line of the descending channel, the downtrend will be over. There is a minor resistance at the 50-day SMA, but we expect it to be crossed. The next target to watch on the upside is $255.620. If this resistance is also scaled, the BSV/USD pair will pick up momentum.
Conversely, if the price plummets to the bottom half of the channel, it can drop to $107. We will wait for the pair to break out and close (UTC time frame) above the channel before recommending any long positions in it.
Stellar (XLM) is attempting to reverse direction from just above $0.080. The relief rally will face resistance at the 20-day EMA, above which a move to 50-day SMA is possible. We might suggest long positions if the price sustains above 20-day EMA for a couple of days.
Contrary to our assumption, if the XLM/USD pair turns down from the 20-day EMA, it can fall to the $0.072545-$0.0760 support zone. A breakdown of the support zone will be a huge negative because the pair will resume the downtrend. With both moving averages trending down and the RSI in negative territory, the bears have the advantage.
Cardano (ADA) broke below the critical support of $0.0592761 on July 15, but the bears could not capitalize on the breakdown. The price bounced back from close to the psychological support of $0.050. This shows a lack of sellers at lower levels.
Currently, bulls are attempting to push the price back above the overhead resistance. If successful, they will face resistance at 20-day EMA. However, if the ADA/USD pair sustains above the 20-day EMA, the rally can extend to the 50-day SMA.
The traders can buy on a close (UTC time frame) above $0.0652290 and keep a stop loss of $0.049. If the pair breaks out of the 50-day SMA, it can move up to $0.10. However, this is a counter-trend trade, therefore, traders should keep the position size only about 50% of usual. Our view will be invalidated if the price turns down from the 20-day EMA and plummets below $0.050.
Market data is provided by the HitBTC exchange.