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Market data is provided by the HitBTC exchange.
The new year has started on a cautious note. Venture capital investor Fred Wilson expects crypto markets to show some “signs of life” this year, but he does not anticipate it to act as a safe haven. The Wall Street Journal (WSJ) expects new investors to enter the asset class following the launch of Bakkt.
Bakkt, which was created by the operator of the New York Stock Exchange (NYSE), has completed a $182.5 million funding round from its partners. The launch date is expected to be announced in the first quarter of 2019. The performance of the leading cryptocurrency is likely to be volatile during the launch of futures trading on Bakkt.
The bear market in 2018 did not spare any cryptocurrency. About 1,000 altcoins vanished last year due to various reasons. Though the media forecast Bitcoin’s death about 90 times during the year, the leading cryptocurrency has managed to survive and is attempting to script another recovery. Bitcoin developer Jimmy Song expects Bitcoin to continue to outperform due to its decentralized nature.
Let’s consult the charts and see which digital currencies are making a move at the start of the year.
BTC/USD
Bitcoin has been stuck in a tight range between $3,912.91 and $3,598.99 since Dec. 26. A breakout of this range will result in another attempt to break out of $4,255. If successful, it will complete an inverse head and shoulders pattern, that has a pattern target of $5,500. Above this level, it can move up to $5,900. Short-term traders can buy on a close (UTC time frame) above $4,255, with the stop loss at $3,550.
The down sloping 50-day SMA shows that the long-term trend is down. The 20-day EMA is flat and the RSI is close to 50, which suggests that the short-term trend is flat. The BTC/USD pair will weaken if it slides below $3,598.99 and the downtrend will resume below $3236.09.
ETH/USD
Ethereum is trying to break out of $167.32. If successful, it can move up to $225. The moving averages have completed a bullish crossover and the RSI is in positive territory, which is a bullish sign.
If the bears defend $167.32, the ETH/USD pair can turn down to $136.12 and below this to the moving averages. We anticipate strong support in this zone.
However, if this zone breaks down, the virtual currency can drop to $100 and below that to the low at $83. Traders can wait for a dip to the support levels to buy.
XRP/USD
Ripple has been trading close to the 50-day SMA for the past seven days. If the bulls break out of this resistance, it can move up to $0.40. A breakout of this level will complete an inverse head and shoulders pattern that has a pattern target of $0.52205 with a minor hurdle at the resistance line of the descending channel.
Therefore, short-term traders can buy on a close (UTC time frame) above $0.40 with a stop loss just below $0.32.
Contrary to our expectation, if the XRP/USD pair turns down from one of the overhead resistances, it will find support at $0.33108 and below it at $0.28600. The downtrend will resume below $0.24508.
BCH/USD
Bitcoin Cash has reached close to the top of the descending channel. The 50-day SMA is located just above the channel. Hence, we anticipate a strong resistance at this level.
If the bulls break out of the overhead resistances, it will resume the recovery that can carry the BCH/USD pair to $307.01 and $355. Therefore, short-term traders can wait for a close (UTC time frame) above the 50-day SMA to buy.
Contrary to our assumption, if the digital currency reverses from 50-day SMA, it can fall to $100. If this level also breaks, it can slump to $73.50.
EOS/USD
Though the bulls have kept the EOS above the 20-day EMA, they have not been able to push it higher. The overhead resistance is at the 50-day SMA and $3.2081. Above both these levels, the move can extend to $3.8723.
On the downside, if the bears sink the EOS/USD pair below the 20-day EMA, it can drop to $2.1733 and below this level, a retest of $1.55 is probable. The down-trending 50-day SMA suggests that the long-term trend is still down. In the short-term, the flat 20-day EMA and the RSI close to the midpoint points to a consolidation in the near-term.
XLM/USD
Stellar has been clinging to the 20-day EMA for the past seven days. On the downside, the bulls have been defending $0.11024826. A breakdown of this support will result in a retest of the low at $0.09285498.
If the XLM/USD pair breaks out of $0.13427050, it can move up to $0.184, with a minor resistance at the 50-day SMA. The digital currency has been an underperformer; hence, we remain neutral on it. We shall turn positive if we find a trend reversal pattern.
LTC/USD
Litecoin has been trading above $29.349 for the past five days. The price is on the verge of breaking out of the 50-day SMA that can result in an attempt to break out of $36.428.
A breakout will complete a bullish inverse head and shoulders pattern that has a target of $49.756. Therefore, we recommend long positions on a breakout and close (UTC time frame) above $36.428.
On the other hand, if the bulls fail to break out of the neckline of the inverse head and shoulders pattern, the bears will attempt to plunge the LTC/USD pair below $28.067 that can result in a retest of the low.
BSV/USD
Bitcoin SV continues to trade inside the $80.352– $123.98 range. It has been inside this range since Nov. 26.
The next move will start on a breakout or breakdown of the range. A breakout will extend the recovery to $167.608, whereas, a breakdown of the range can result in a retest of the low at $38.528. However, if the BSV/USD pair does not break out of the range, it will extend its consolidation. The longer the range, the stronger the eventual break from it will be. Therefore, traders can buy on a breakout and close above $123.98.
TRX/USD
TRON again held the support at the $0.0183 level on Jan. 1. The 20-day EMA continues to slope up, which is a bullish sign.
A breakout of the downtrend line increases the probability of a move to $0.0246 and above it to $0.02815521. Traders who are long can hold with the stops at $0.018.
On the other hand, if the bears sink the TRX/USD pair below $0.018, it can drop to the 50-day SMA, and below it to $0.013.
ADA/USD
Cardano has been trading between the 20-day EMA and the neckline of the inverse head and shoulders pattern.
We expect the bulls to attempt a breakout of the neckline within the next few days. Due to the tight consolidation near the neckline, we expect the ADA/USD pair to scale the immediate resistance of $0.060105 and rally towards the pattern target of $0.066. Traders can initiate long positions following a close above the neckline.
However, if the digital currency fails to breakout of the neckline and slumps below the 20-day EMA, it can decline to $0.036815 and below this level, it can drop to $0.027237.
Market data is provided by the HitBTC exchange. Charts for analysis are provided by TradingView.