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The market data is provided by the HitBTC exchange.
On August 22, the U.S. Securities and Exchange Commission (SEC) rejected 9 proposals for new Bitcoin exchange-traded funds (ETFs), but - perhaps surprisingly - the news did not result in a crypto market crash, like it did in similar instances before. This shows that very few purely speculative positions had been built expecting an ETF application to be approved.
Another negative piece of news about China further tightening its restrictions on cryptocurrency trading was also taken in stride by the traders. When an asset class holds on to its support levels even after several negative news, it shows that the bears are losing their grip. Some are even expecting a trend reversal on Bitcoin.
On August 23, the SEC said that it will review its previous decision on the ETF rejections. However, the probability of any different ruling is low. Brian Kelly, a crypto analyst with CNBC expects Bitcoin ETFs to see the light of the day only by February 2019.
Barring a dip on August 14, the total market capitalization of the cryptocurrencies has held above the $200 billion mark. This shows that the selling has subsided and the bulls have gradually started accumulating around the current levels.
So, is this the right time to start cherry picking? Let’s find out.
BTC/USD
Bitcoin has been making lower highs in 2018, but it is yet to make a lower low. It has largely held the February 6 low of $6,075.04. A couple of breakdowns below this level were not sustained and prices bounced back quickly.
The bulls broke out of the descending triangle pattern in the end of July, but they could not sustain the higher levels and the price again slumped back into the triangle. Currently, the bulls are again trying to break out of the triangle but are facing a stiff resistance close to the $6,580 mark. The 20-day EMA is also located at this level.
If the bulls scale the $6,600 levels, the rally is likely to extend to $6,955.79. The 50-day SMA is located just above this level and has flattened out, hence it will act as a major resistance. The BTC/USD pair will turn positive and pick up momentum only above this resistance. Until then, a range bound trading between $5,900–$7,000 can be expected.
The cryptocurrency will turn negative if it plunges below $5,900. That will increase the probability of a fall to $5,450 and beyond that to $5,000.
As the $5,900 level haven’t been broken down this year, we suggest traders hold their long positions. If the bulls fail to break out of $7,000 next time, we recommend closing the position because we might get an opportunity to buy again at lower levels. We should get a better picture in the next couple of days.
ETH/USD
Ethereum has been struggling to bounce from the recent lows. It has not even pulled back to the 20-day EMA, which shows a lack of buying at the current levels.
Both moving averages are sloping down and the RSI is also in the negative territory, which shows that the trend is headed downward. If the bears break below $249.93, the downtrend can extend to $200.
The ETH/USD pair will turn positive if the bulls breakout and sustain above the 50-day SMA. We might propose a long position earlier if we find a reliable buy setup. Until then, it is best to remain on the sidelines.
XRP/USD
Ripple is an underperformer, having lost about 90 percent of its value from its all-time-high. Though it bounced back from $0.24508, it is struggling to find buyers at higher levels.
The XRP/USD pair will show some signs of strength if the bulls scale above the 20-day EMA, the downtrend line 2 and the 50-day SMA. The trend will change after the price breaks out of the downtrend line 1.
On the downside, $0.24001 is the critical support to watch out for. We believe the virtual currency will spend some time in a basing pattern, before moving up. The traders should wait for a reliable buy setup to form before initiating any long positions.
BCH/USD
Bitcoin Cash has been trying to cling on to the $500 level for the past ten days, but the buying keeps drying up above the $600 mark.
Any pullback will face a stiff resistance at the 20-day EMA and the 50-day SMA. The BCH/USD pair will show first signs of a recovery if it sustains above the downtrend line.
On the downside, if the bears break below $500, a retest of the August 14 lows will be on the cards. If this level breaks, the next stop is $400. We suggest traders wait for buying to resume before initiating any long positions.
EOS/USD
The bulls are trying to hang on to the critical support at $3.8723. However, they are not able to push EOS above the moving averages, which shows that the sellers are still in command.
From March to April of this year, the EOS/USD pair had spent a lot of time consolidating, after bouncing off the lows. It commenced its upward move only after breaking out of the 50-day SMA convincingly.
We shall turn positive on the digital currency only after it breaks out and sustains above the 50-day SMA. Until then, we suggest traders stay on the sidelines.
XLM/USD
Stellar has not broken down convincingly of the $0.184 level since mid-December of last year. It has revisited this level thrice in 2018 and the previous two occasions resulted in a bounce. So, until the bears break down and sustain below the support, we expect it to hold. Therefore, we retain our buy recommendation given on August 15.
The XLM/USD pair has been consolidating between $0.184 and $0.25 since August 5. A break out of the range has a pattern target of $0.3157505, which is also close to the downtrend line. Above this resistance, the next target is $0.36.
If the bears break below the range, the virtual currency can fall to the pattern target of $0.11812475.
LTC/USD
The bulls are trying to arrest the decline on Litecoin. For the past 13 days, the price has been stuck inside the range of $49.318–$62.319.
A breakdown of the range will resume the downtrend and has a pattern target of $36.317, with a minor support at $40.
If the bulls succeed in breaking out of the range, the LTC/USD pair can move up to its pattern target of $75.32. As the 50-day SMA has not been scaled since May 16 of this year, we shall wait for the price to sustain above it and the downtrend line before turning bullish.
Currently, the virtual currency is in a no-trade zone.
ADA/USD
Even after a 93 percent fall from its intraday high of $1.396281, Cardano is struggling to find buyers. The downward sloping moving averages and the weak RSI reading show that the sellers still have an upper hand.
The ADA/USD pair has been trading in the range of $0.083192–$0.112598 for the past ten days. A breakdown of the range can result in a fall to $0.078, though the pattern target is way lower.
On the upside, there are numerous resistances between $0.111843 and $0.14. We shall turn positive after the price sustains above the 50-day SMA.
XMR/USD
Though Monero is in a downtrend, it has reached the critical support around $81, which had held from August 23 to November 6 of last year, before the uptrend started. Therefore, we expect the bulls to strongly defend this level.
For the past week, the 20-day EMA has been acting as a strong resistance and the bulls are struggling to break out and stay above it. Below $87, the XMR/USD pair can retest the low of $76.074.
On the upside, the first sign of a change in trend will be when the bulls succeed in scaling above the long-term downtrend line. Until then traders should stick to the other cryptocurrencies that are showing strength.
IOTA/USD
IOTA is in a downtrend. Both moving averages are sloping down and the RSI is in the negative territory, which shows that the sellers still have the upper hand.
For the past seven days, the IOTA/USD pair has been trading in a range of $0.4628–$0.5750. The break down from the range gives it a pattern target of $0.3506, with a minor support at the August 14 low of $0.4037.
If the bulls succeed in breaking out of the range and the 20-day EMA, a rally to $0.6872 is probable. If this level is crossed, the upward move can extend to the 50-day SMA at $0.82. Therefore, we retain the buy recommendation given in the previous analysis. Only traders with a high risk appetite should attempt this trade.
The market data is provided by the HitBTC exchange. The charts for the analysis are provided by TradingView.