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* BTC/USD, ETH/USD and LTC/USD market data is provided by the HitBTC exchange.
Similar to all markets, even in cryptocurrencies, traders continue shifting their loyalties from Bitcoin to altcoins, which results in one outperforming the other. While comparing the performance of the top 5 cryptocurrencies in the third quarter of this year, Bitcoin has emerged as the leader, gaining 74%. Bitcoin Cash was not considered, as it did not trade for the full quarter.
The second largest cryptocurrency by market capitalization, Ethereum, turned out a weak performance, rising only 8% in the third quarter. This is in stark contrast to its staggering rally of 500% in the second quarter of this year.
This shows that traders will make money only if they are invested in the right cryptocurrency. Let’s find the most promising one to trade now.
BTC/USD
We have carried long positions in Bitcoin for both the swing traders and the aggressive traders. Both these positions are currently in a profit. What should the traders do now?
Bitcoin has risen from the critical support levels of $4114 to $4170, according to our expectations. If the digital currency breaks out of $4488, it is likely to rally to $4680 levels. This is the last resistance before a retest of the highs at $5000.
Therefore, swing traders should continue to hold their positions, but they should raise their stop loss from $4000 to $4100. They should tighten their stops further once the digital currency breaks out of $4488.
The aggressive traders should book 30% of their profits at the current levels of $4387 and hold the rest with a stop loss of $4100. This will reduce their risk on the existing positions. Once Bitcoin rallies above $4488, they should again raise their stop loss to breakeven and book partial profits at $4680.
Our bullish view on bitcoin will be invalidated if it turns down and breaks below $4100 levels. That can extend the fall to $3909 and $3731 levels, which are 38.2% and 50% Fibonacci retracement levels of the pullback from $2974 to $4488.01.
ETH/USD
Ethereum has spent the past few days consolidating in a tight range. This shows an equilibrium between both the bulls and the bears. Neither party is able to overpower the other. However, this is unlikely to continue for long. One of the two will emerge as a winner.
If Ethereum breaks out of the upper end of the range at $317, it is likely to start a new uptrend, which has a pattern target of $354. Therefore, we recommend a long position on the digital currency at $317.
The initial stop loss can be kept at $278, which should be raised as the cryptocurrency moves higher. The stops should be tightened further if Ethereum struggles to breakout of the overhead resistance at $344.
If, however, the bears manage to push Ethereum below $278, it will open up a downside of $257.94, which is the 50% Fibonacci retracement level of the pullback from $200.15 to $315.72.
BCH/USD
Bitcoin Cash is attempting to stabilize after breaking down of the range. However, compared to the other cryptocurrencies, it still lacks buying interest.
We have been cautious on Bitcoin Cash for the past few days. The digital currency continues to trade below both the critical moving averages and the downtrend line. This shows that it remains in a downtrend. Therefore, we don’t recommend a long trade on Bitcoin Cash.
The first target on the downside is $300 if Bitcoin Cash is unable to climb above $385.
On the other hand, if the cryptocurrency rallies above the downtrend line and the 20-day EMA, it will signal strength.
Traders who trade only Bitcoin Cash can buy at $436 and keep a stop loss of $336. The profit objective is $549.
Rest of the traders are better off trading other cryptocurrencies.
XRP/USD
Our long position in Ripple continues to make gains. It is close to our target objective of $0.25000. Should traders book profits?
The downtrend line at $0.25000 is likely to offer a strong resistance. However, if the digital currency breaks out of it, a rally to $0.3000o is possible.
Therefore, traders can book partial profits, about 30% at the current levels and raise the stops on the remaining position to breakeven.
This will ensure that the traders pocket some profits and the remaining position becomes risk-free.
They should continue to trail their stops higher if the digital currency breaks out of the downtrend line.
LTC/USD
Currently, Litecoin is trading at the center of the range between $44.16 and $57.729. How can we trade it?
The best way to trade in a range is to buy at the support and sell at the resistance. However, as price is ruling at the midpoint, we don’t recommend a trade at the current levels.
Nevertheless, if Litecoin breaks out of the range, it will signal strength. Therefore, we recommend a long position at $58 with a stop loss of $49. The target objective of this trade is $71.
However, if the digital currency breaks below $50 and falls to $44 levels, we shall wait and watch its performance at the lows before buying it. We don’t recommend a long position at $44 anymore because of the lack of buying interest in the digital currency.