The seesaw price action over the past week has lightened up the crypto space once again. While the aggressive bulls view the sharp upside move as a bottoming signal, the bears consider the rise as a bear market rally that should be sold into. However, as traders, our goal should be to identify the trend and trade with it.
Bitcoin (BTC) futures trading volume on Bakkt has surged over the past three days. This suggests that the recent market activity has generated interest among institutional traders who expect a sharp directional move.
Cryptocurrency market daily performance. Source: Coin360
If the price remains strong and the volumes remain elevated for a few days, it will indicate accumulation by the investors. Such a move could result in a new uptrend. Conversely, if the cryptocurrencies quickly give back the recent gains and the volumes remain high, it will be a sign that market participants used the sharp rally to sell. Let’s analyze the charts of the major cryptocurrencies and try to find the trend in each.
BTC/USD
Bitcoin rallied from an intraday low of $7,380.67 on Oct. 25 to an intraday high of $10,360.89 on Oct. 26. That was a massive gain of about 40% within a two-day period. Usually, after such a sharp move, the markets enter a period of consolidation to digest the gains. How should the traders approach it now?
The rally in the BTC/USD pair is facing stiff resistance at the downtrend line. This shows that the bears are still active at higher levels. However, the pullback is likely to find support in the $9,080 to $8,777.89 zone.
The 20-day EMA is sloping up and the RSI is in positive territory, which shows that advantage is with the bulls. Another positive signal is that the moving averages are on the verge of a bullish crossover. Therefore, traders should view the dips to the support zone as a buying opportunity.
However, we do not expect an uptrend to start instantly. We anticipate a few days of consolidation before the bulls assert their supremacy once again. A new uptrend will be signaled on a break above the downtrend line.
Our bullish view will be negated if the bears sink the price below the 20-day EMA. If this support breaks down, the pair might retest the recent lows of $7,297.21.
ETH/USD
Ether (ETH) broke above the downtrend line and spurted to the overhead resistance at $196.483 on Oct. 26 but could not scale it. This shows that bears are mounting a stiff resistance at $196.483.
However, on the downside, the bulls are purchasing the dips to the previous resistance turned support at the downtrend line.
The ETH/USD pair closed (UTC time) above the 50-day SMA on Oct. 27, which triggered our buy recommendation given in the previous analysis. If the price stays above the 20-day EMA, we anticipate another attempt by the bulls to scale $196.583. If successful, a rally to $235.70 will be on the cards. Hence, traders can retain the stop loss on their long positions at $150.
Our bullish view will be invalidated if the bears sink the price back below the moving averages and the downtrend line. In such a case, a drop to $161.056 is possible.
XRP/USD
Though the bulls have managed to keep XRP above $0.29227 for the past three days, they have not been able to propel it towards the next overhead resistance at $0.34229. This shows a lack of demand at higher levels.
However, if the price does not slip below $0.29227, we expect another attempt by the bulls to carry the price to $0.34229 where the traders can book partial profits. The climbing 20-day EMA and the RSI in positive territory suggests that bulls have the upper hand. Therefore, long positions can be held with a stop at $0.24. Our bullish view will be invalidated if the bears sink the price below both moving averages.
BCH/USD
The pullback in Bitcoin Cash (BCH) turned around from the neckline of the head and shoulders pattern on Oct.25. We were anticipating this and suggested to buy on dips closer to $242 in our previous analysis, rather than chase the price higher. The dip on Oct. 26 provided that opportunity to initiate long positions.
We now anticipate another attempt by the bulls to break out of the neckline. If successful, a rally to $360 will be on the cards.
Conversely, if the bears defend the neckline once again, the pair might remain range-bound between $241.85 and the neckline for a few days. A fall below $241.85 will break the momentum and the trend will turn negative below $197.84. For now, the stops on the long positions can be retained at $196. We will suggest trailing stops higher to $235 at the earliest available opportunity.
LTC/USD
The upside move on Oct. 26 carried Litecoin (LTC) to $63.3876, which triggered the buy recommendation given in the previous analysis. However, the bulls have not been able to capitalize on the breakout of the downtrend line because the altcoin has again dipped below $62.0764. This shows a lack of buyers at higher levels.
If the bears sink the price below the downtrend line, it will be a bearish sign. Both moving averages are flat and the RSI is close to the midpoint. This suggests a range-bound action for a few days. The trend will turn negative on a break below the recent lows of $47.1851. Therefore, traders can keep a stop loss at $47.
Conversely, if the LTC/USD pair rebounds off the 20-day EMA, the bulls will again attempt to push it above $62.0764. If successful, a move to $80.2731 is likely.
EOS/USD
Though the bulls managed to propel EOS above the overhead resistance of $3.370 for the past two days, they have not been able to sustain above it. This shows selling at higher levels. As the price did not close (UTC time) above $3.370, our buy recommended in the previous analysis was not triggered.
Currently, the bulls are again attempting to hold the price above $3.370. If successful, a rally to $4.240 and above it to $4.8719 will be on the cards. Therefore, traders can buy above $3.58 and keep a stop loss of $2.40.
Contrary to our assumption, if the bears sink and sustain the price below $3.370, the EOS/USD pair will remain range-bound for a few days. The trend will turn negative below $2.4001.
BNB/USD
Binance Coin (BNB) broke out and closed (UTC time) above the descending channel on Oct. 27, which triggered our buy suggested in an earlier analysis. Both moving averages are on the verge of a bullish crossover and the RSI is in the positive territory. This suggests that the bulls are in command.
The BNB/USD pair will now start its journey towards the target objective of $32 and above it to $40. Our positive view will be invalidated if the price turns down and re-enters the channel. Such a move will indicate that the current breakout was a bull trap. The traders can protect their long positions with the stop loss at $14.
BSV/USD
Bitcoin SV (BSV) has formed inside day candlestick pattern for the past two days. This shows that the bulls are taking a break after the recent sharp rally. The altcoin can now pullback to $129.589 and below it to $121.743, which are 38.2% and 50% retracement levels of the recent leg of the rally.
If the BSV/USD pair bounces off the above-mentioned support levels, it will attempt to break out of $155.38 and rally towards the next target objective of $188.69. The bullish crossover on the moving averages also suggests that the buyers are in command and dips should be viewed as buying opportunities.
As the pair has a history of vertical rallies and waterfall declines, we will watch the price action at the support and then recommend a long position. The pair will weaken if the pullback slips below the previous resistance turned support at $107.
TRX/USD
Tron (TRX) picked up momentum after breaking out of the downtrend line and scaled above the stiff overhead resistance at $0.018660. The 20-day EMA has started to turn up and the RSI is close to the overbought zone. This indicates that the bulls are in the driver’s seat.
However, the bulls are unable to sustain higher levels, which is seen in the long wick on the daily candle. If the price slips back below $0.018660, the TRX/USD pair can retest the downtrend line. A strong bounce from the 20-day EMA could be a good entry point with the stops placed at $0.0111.
Our bullish view will be invalidated if the pair turns down from the current levels and breaks below the immediate support of $0.0136655.
XLM/USD
Stellar (XLM) has reached the downtrend line where it is likely to face resistance. If the bulls can scale above this, it will pick up momentum and rally to $0.088708. For now, traders can protect their long positions with a stop at $0.051.
Both moving averages are flat and the RSI is just above the midpoint, which shows a balance between buyers and sellers. If the XLM/USD pair turns down from current levels, it could dip to $0.056 once again.
A break below this support will be the first signal that the bulls are losing their grip. Below $0.056, the decline can extend to $0.051014.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Market data is provided by HitBTC exchange.