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Market data is provided by the HitBTC exchange.
Experts are divided over the future behavior of the crypto markets. Mike Kayamori, CEO of Quoine, expects Bitcoin to make new lifetime highs by the end of next year, and believes that the bottom is close to current levels.
On the other hand, Malachi Salcido, head of Wenatchee, Washington-based Salcido Enterprises, expects the situation to “possibly get a little worse before it gets better," reports Bloomberg. He anticipates markets to bottom out in February of next year.
Though the markets are way below their lifetime highs, it has not deterred investments from large players. The ability of new ventures to raise funding shows that interest in the space is alive and the markets have a bright future.
In a recently published report, American global management consulting firm A.T. Kearney suggests that Bitcoin will reclaim two-thirds of crypto market capitalization by end of next year. Currently, Bitcoin dominance is about 54 percent. This means that Bitcoin will move up at the expense of altcoins. Investors should avoid buying shady cryptocurrencies and stick to ones with visibility.
BTC/USD
The main trend in Bitcoin is down. For the past two days, the bulls have been trying to defend the trendline of the pennant but have not been able to push prices higher. This shows a lack of buying at higher levels and selling pressure. The moving averages are sloping down and the RSI is close to oversold territory. A breakdown of the pennant will resume the downtrend and has a pattern target of $2,416.52.
We believe that the BTC/USD pair will witness strong buying in the $3,500–$3,000 zone. Contrary to our opinion, if bears sink prices below $3,000, then the next stop will be $2,416.52.
If the bulls succeed in holding the trendline of the pennant on a closing (UTC time frame) basis and reverse direction, it will indicate strength. The first indication of a trend change will be when the price sustains above the resistance line of the pennant. A breakout of the 20-day EMA will increase the probability of a pullback to the breakdown levels of $5,900.
There is a possibility that the price will remain stuck around current levels for the next few days. If the price moves out of the apex of the triangle, without a breakout or a breakdown, the pennant formation will be invalidated and the digital currency might enter a range.
We should get a clearer picture within the next 3–4 days. Meanwhile, traders can keep their stops on the long positions, as suggested in the previous analysis.
XRP/USD
The bulls have been trying to keep Ripple above the immediate support of $0.33108 for the past two days but they have not been able to secure a strong rebound. This shows that the bears have an upper hand.
A break below $0.33108 will result in a drop to the Nov. 25 lows of $0.31123. The support line of the descending channel is just below this level. We anticipate strong support in this zone. Contrary to our opinion, if the bears sink the XRP/USD pair below the channel, a retest of $0.24508 is probable.
If the bulls defend the bottom of the channel and rebound sharply, breaking out of the 20-day EMA, it will increase the probability of a rally to the top of the channel at $0.52. Traders can close their long positions if the price sustains below the channel.
ETH/USD
Ethereum has slipped to the bottom of the range. A breakdown of the lows will resume the downtrend and can plunge it to the next lower support at $83.
If the bulls buy the drop to $100, the ETH/USD pair will attempt to climb to $130.5, where it will face a stiff resistance from the declining 20-day EMA.
A pullback to $167.32 can be expected if the bulls sustain the price above $130.5. Though short-term traders can attempt to go long, positional traders should wait for a new buy setup to form before initiating any long positions.
XLM/USD
With both the moving averages falling and the RSI close to the oversold levels, Stellar is in a clear downtrend.
The bears successfully defended a retest of the breakdown level at $0.184 and the XLM/USD pair has turned down once again. A breakdown of $0.13427050 will resume the downtrend. The next level to watch on the downside is $0.08.
If the bulls defend the $0.13427050 level, the digital currency might remain range-bound for a few days. We shall turn positive on it if the price sustains above $0.184. Until then, it is best to remain on the sidelines.
BCH/USD
Bitcoin Cash is in a firm bear grip. The price has broken down of the Nov. 25 intraday low of $148.27, resuming the downtrend. The next support on the downside is way lower at $100. However, the RSI has dipped deep into oversold territory, which suggests that a pullback might start much earlier than $100.
After the sharp drop of the past few days, we anticipate the BCH/USD pair to witness a sharp pullback. The short-term traders can use the opportunity to ride this move higher but, first, the price has to stop falling. Catching a falling knife can be dangerous. Therefore, traders should wait for demand to outweigh supply before entering any fresh positions.
EOS/USD
EOS is on a one-way track. Since breaking down of the $4.493 level, it has been making new year-to-date lows on a regular basis. The downtrend is so strong that the bulls have not been able to sustain the pullback for more than a day.
The trend will remain in force as long as the bears keep the price below the downtrend line. The first target on the downside is a drop to $2.
However, the RSI has been in the oversold zone since Nov. 19. This shows that selling has been overdone and a pullback can be expected from $2. After such a sharp down move, the EOS/USD pair is likely to enter into a bottoming formation. Traders should wait for a bullish pattern to form before entering any long positions.
LTC/USD
The bulls have been attempting to put a bottom in Litecoin close to the $28 mark. The recovery on the upside stalled at the 20-day EMA, which confirms a strong downtrend.
A breakdown of $28 will resume the downtrend and can sink the LTC/USD pair to the next support at $20. If the bulls defend the $28 mark, the digital currency might remain range-bound for a few days.
A breakout of $37 will set up a short-term trading opportunity on the long side, with a target objective of $47, which is likely to act as a stiff resistance. Positional traders should wait for a trend reversal to be signaled before entering long positions.
ADA/USD
The main trend in Cardano is down. For the past few days, it has been consolidating in a tight range. If the bears break down of the range, the main trend will reassert itself, with the next support at $0.025954.
The 20-day EMA is declining and is located just above the top of the range. We anticipate this level to act as a strong resistance on any pullback.
However, if the bulls push prices above the 20-day EMA, the ADA/USD pair can rally to the overhead resistance of $0.060105. Short-term traders can ride this move higher but the positional traders should wait for a new uptrend to start before jumping in.
TRX/USD
Though TRON has not broken out of the 20-day EMA in the past few days, we like the way it has held its support. It remains comfortably above its recent lows.
The bulls have been holding the TRX/USD pair above $0.0133 level for the past five days, whereas, the bears have been defending the 20-day EMA on the upside.
If the bulls scale the 20-day EMA, a rally to the next overhead resistance of $0.0183 is probable. On the contrary, if the bears sink the virtual currency below $0.0133, a retest of the Nov. 25 low of $0.01089965 is likely. Traders should wait for a bullish setup to form before buying. We expect a breakout or a breakdown within the end of this week.
XMR/USD
The bulls are attempting to defend the low of $53.1 in Monero for the past two days. But they have not been able to secure a bounce, which shows a lack of buying interest. Both the moving averages are sloping down and the RSI is close to the oversold territory, which suggests that the path of least resistance is to the downside.
If the XMR/USD pair closes (UTC time frame) below the $53 level, the decline can extend to the next support at $40. On the upside, the 20-day EMA will continue to act as a stiff resistance. The traders should wait for the trend to change from down to up before initiating any long positions.
Market data is provided by the HitBTC exchange. Charts for the analysis are provided by TradingView.