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The market data is provided by the HitBTC exchange.
The crypto markets are tumbling, and their total market capitalization is down to $265 billion from about $380 billion that we saw May 22. This means that the selling momentum has picked up. After a prolonged downtrend, sharp falls indicate that panic has gripped the investors and they just want to sell at any given level. This seems to be the state of the crypto markets right now.
We were skeptical of the bull run in December and had called for the traders to sell their positions. Did we get the exact top? No. But our general direction and analysis proved to be correct.
Similarly, we believe that the bear run is in its last legs. Can we or in fact anyone pinpoint the bottom? No.
We can only make a calculated prediction about the bottom after careful analysis. The market can easily overshoot on the downside, but after such a large decline, the recovery from the bottom is also likely to be very strong. Hence, we have been advising long-term investors to gradually build positions on weakness. A few other traders are also advising the same for the long-term ‘hodlers.’
If cryptocurrencies were a bad investment, the large institutional players would not be willing to enter the game. Their increasing interest shows that they see long-term value in it. Once they make an entry, prices are unlikely to remain low.
Trading, on the other hand, is a different ball game because its goal is to capitalize on short-term price action. We propose trades in our analysis only when we find a reliable buy setup with an attractive risk to reward ratio. Let’s see if we can locate any buy setups today.
BTC/USD
Selling in Bitcoin is gathering momentum, as it continues to slump towards its critical support at $6,075.04. Though many traders and analysts are forecasting lower levels, we shall take it one level at a time.
Until $6,075.04 breaks, we shall continue to hold our view that the leading digital currency is in a large range. The frequent crisscrossing of the 20-day EMA and the 50-day SMA also supports our view of a range bound action.
However, if the bears break below the $6,075.04 level, we will change our view to bearish. The next support on the downside is the zone between $5,450.86-$5,356.95.
We are also keeping an eye on the RSI. It is already in the oversold territory but this is not a reason in itself to buy because, during panic selling, the RSI can get deeply oversold and remain there for some time.
We suggest traders wait for the BTC/USD pair to stop falling and show a decent rebound before entering fresh long positions.
Long-term investors should not be in a hurry to add below $6,075.04 levels. The next level where they can add is closer to $5,450.
Any attempt to pullback will face resistance at the 20-day EMA and the downtrend line.
ETH/USD
The bulls have failed to hold the $492.5 support levels on Ethereum. It can now slide to the support line of the descending channel at $380. We anticipate strong support between the zone of $358-$380.
The first sign of a change in trend will be indicated when the ETH/USD pair climbs above the $492.5 levels and sustains it for a couple of days.
We shall turn bullish once the bulls succeed in breaking out of the downtrend line. Until then, all rallies are likely to be sold into. Therefore, we suggest waiting until the virtual currency forms a new buy setup.
XRP/USD
Ripple continues to move lower towards its critical support of $0.45351. This is the final support below which the decline can extend to $0.24 levels, erasing the complete up move that started on December 12 of last year.
We expect the bulls to defend the support zone of $0.45351-$0.56270. The RSI is near the oversold levels, which suggests that the selling has been overdone.
The XRP/USD pair will become bullish only above the downtrend line of the descending triangle, but we shall propose long positions once it climbs above $0.56270 levels and sustains it for a couple of days.
BCH/USD
Bitcoin Cash has broken below the minor support at $878. It should now take support in the zone of $736.0137-$777.5304.
Any attempt to pullback will face resistance at the 20-day EMA, which is near the downtrend line. Additionally, the BCH/USD pair has a history of entering into small trading ranges for a few days, before moving out of it.
Therefore, we shall wait for it to stop falling, enter into a trading range and then buy if we get a reliable setup.
EOS/USD
EOS has broken below the support at $10.3384 and the 78.6 percent Fibonacci retracement of the rally from $5.9610-$23.0290. The fall can now extend to $8 levels.
The 20-day EMA has turned down, however, the 50-day SMA is still holding close to flat levels. If the bulls quickly rise above the $10.3384 levels, it will indicate that the markets have rejected the breakdown.
We shall wait for the EOS/USD pair to stop falling before recommending any long positions.
LTC/USD
Litecoin broke down of the critical support at $107.102 on June 12, which completes the bearish descending triangle pattern. The pattern targets of this breakdown are off the charts; hence, we shall take it one step at a time.
The first support is at $84.708 and below this, the next support is at $75.131. It is difficult to forecast which one of the two supports will hold.
The RSI is deep in the oversold territory; hence, recovery can’t be ruled out. Notwithstanding, we shall not suggest any long positions until the LTC/USD pair trades below $107.102 levels.
ADA/USD
Cardano continues to slide towards its next major support at $0.13. This support had held between March 18-April 06 on a closing (UTC) basis.
Hence, we believe that buying will again emerge near the $0.13 levels. The RSI is also close to the oversold levels, which points to the possibility of a bounce off the major support.
The bounce will face resistance at the 20-day EMA. We shall turn bullish only if the bulls succeed in breaking out of the 20-day EMA and sustain it for a couple of days. Until then, we shall not suggest any long positions on the ADA/USD pair.
XLM/USD
Stellar is moving towards its next lower target objective of $0.1840. Though this level has been breached on an intraday basis on a few occasions since mid-December, it has always managed to close (UTC) above it.
Hence, we believe that $0.184 level will again act as strong support. So, should the traders buy the fall to $0.184 right away?
No. We suggest traders wait for a couple of days and buy only when the fall in the XLM/USD pair is arrested. Any break of the support on a closing basis (UTC time frame) can extend the decline to $0.1 levels.
IOTA/USD
The bulls could manage to hold the $1.33 levels only for a day on June 11, post which, IOTA continued its journey southwards. It easily broke the support and is now on target to sink to the major support at $0.9150.
We expect a strong buying close to the bottom of the probable range. If we find the buying sustain for a couple of days near the lows, it might offer the traders a low-risk entry opportunity.
However, we suggest waiting until the IOTA/USD pair stops falling because if the bears break below $0.9150, the fall can extend to $0.666 levels.
On the upside, any recovery attempt will face resistance at the $1.33 levels.
The market data is provided by the HitBTC exchange. The charts for the analysis are provided by TradingView.