The futures market provides good insight into the sentiment of larger players. If the futures volume continues to rise in a falling market, this indicates that a decline is likely to extend further. However, if the volume increases with a rise in price, this shows that the market participants are accumulating positions.
On Nov. 27, Bitcoin closed in the green and Bitcoin futures on Bakkt hit a new all-time high volume record which was 60% higher than the previous record. This shows that institutional players have increased their activity during the most recent relief rally. This points to possible accumulation at lower levels and institutional interest is likely to increase further with the launch of Bitcoin Options contracts on Dec. 9.
Daily cryptocurrency market performance. Source: Coin360
A growing list of countries appear to be taking steps to become more crypto friendly. In that direction, Germany has introduced a new bill that will facilitate the sale and custody of cryptocurrencies by banks. Sven Hildebrandt, the Head of Distributed Ledger Consulting, said that Germany was “on its way to becoming a crypto-heaven.”
The price action after the recent fall has been encouraging. However, buying the first pullback after a decline can be a risky affair. Traders should wait for reversal patterns to develop before initiating fresh long positions again. Let’s see, if we spot any reliable buy setups on the major cryptocurrencies.
BTC/USD
Bitcoin (BTC) broke out of the first resistance at $7,337.78 on Nov. 27 and is currently attempting to breakout of $7,702.87. Above this level, there is a minor resistance at the 20-day EMA but we expect it to be crossed.
The next level to watch on the upside is the 50-day SMA and above it $9,080. The recovery from the bottom has been gradual but steady, which is a positive sign.
BTC USD daily chart. Source: Tradingview
The 20-day EMA is flattening out and the RSI has risen from oversold levels to just below 50. This shows that bulls are back in the game.
We anticipate a minor dip from one of the overhead resistance levels. The next fall should give us an idea whether the current pullback was a dead cat bounce or is the bottom in place. Though it is too early to call a bottom, signs look encouraging.
Our bullish view will be invalidated if the bears sink the next dip below the recent low of $6,512.01. We do not find a reliable buy setup yet, hence, we are not recommending a long position on the BTC/USD pair.
ETH/USD
Ether (ETH) has broken out of the overhead resistance at $151.829. It will now move up to the 20-day EMA and above it to $173.841 where we anticipate sellers to step in. The downsloping 20-day EMA and the RSI in negative zone indicates that bears have the upper hand.
ETH USD daily chart. Source: Tradingview
If the ETH/USD pair dips from one of the overhead resistance levels and breaks below the recent low of $131.484, the downtrend will resume. If the pair finds support above $140, it will signal buying on dips.
Such a move will offer a low-risk buying opportunity. We will wait for the confirmation of a bottom before proposing a trade in it.
XRP/USD
XRP has managed to stay above the first overhead resistance at $0.22, which indicates some buying by the aggressive bulls. We now expect the bulls to extend the relief rally to the next overhead resistance at $0.24508. The 20-day EMA is placed close to this level, hence, we expect it to act as a major roadblock.
XRP USD daily chart. Source: Tradingview
If the price turns down from the 20-day EMA but finds support at $0.22, it will indicate bottom fishing by the long-term players. We will watch the price action closer to $0.22 before recommending a trade in it.
The XRP/USD pair will turn negative if the next fall breaks below the recent lows of $0.20041. If that happens, the fall can extend to $0.18.
BCH/USD
Bitcoin Cash (BCH) has broken out of the overhead resistance at $218.57. It can now move up to the 20-day EMA and above it to the 50-day SMA. We anticipate stiff resistance at the moving averages.
BCH USD daily chart. Source: Tradingview
A breakout of the moving averages will be a positive sign that can carry the BCH/USD pair to $306.78. Conversely, if the price turns down from any of the overhead resistances, it will again dip towards the support at $192.52. We will wait for a reversal pattern to form before suggesting a trade in it.
LTC/USD
The previous support zone of $50 to $47.1851 is acting as a strong resistance. Even if the bulls propel Litecoin (LTC) above this zone, the moving averages will again act as a hurdle.
On crossing above the moving averages, the next stop will be $66.1486 to $62.0764 resistance zone. As there are several overhead resistances, we will wait for the pair to form a new buy setup before proposing a trade in it.
LTC USD daily chart. Source: Tradingview
The 20-day EMA is sloping down and the RSI is in the negative territory, which suggests that bears have the upper hand. If the price turns down from the current levels and plummets below the recent low of $42.0599, the LTC/USD pair can decline to $36.
EOS/USD
EOS is attempting to pullback to the 20-day EMA, which is flattening out. The RSI is rising towards the center, which shows that the buyers are making a comeback. However, if the price turns down from the 20-day EMA, the bears will attempt to sink it below the support at $2.4001.
EOS USD daily chart. Source: Tradingview
Alternatively, if the bulls can carry the EOS/USD pair above both moving averages, a rally to $3.69 is likely. We do not find any reliable buy setups at the current levels, hence we are not recommending a trade in it.
BNB/USD
Binance Coin (BNB) is consolidating in the $16.50 to $14.2555 range. As the 20-day EMA is sloping down and the RSI in the negative zone, the advantage is with the bears. If the consolidation resolves to the downside, a decline to $11.30 is possible.
BNB USD daily chart. Source: Tradingview
Conversely, if the bulls can push the price above $16.50, the BNB/USD pair can move up to the 20-day EMA, which is likely to act as a stiff resistance.
However, if the price fails to sustain above $16.50, a few more days of consolidation are likely. Longer the range, stronger will the breakout or breakdown from it. Therefore, we will suggest long positions after the pair sustains above $16.50.
BSV/USD
Bitcoin SV (BSV) had been trading just below the 20-day EMA for the past four days. Though the bulls pushed the price above the 20-day EMA today, they have not been able to sustain it. This shows a lack of demand at higher levels.
The 20-day EMA is flattening out and the RSI is gradually climbing towards the center, which suggests a balance between demand and supply.
BSV USD daily chart. Source: Tradingview
The BSV/USD pair has formed an ascending triangle in the short-term, which is a positive sign. The pattern will complete on a breakout and close (UTC time) above $113.96. This gives it a minimum target objective of $139.199 and above it $155.380.
Our bullish view will be invalidated if the price turns down from the current levels and breaks below the triangle. Such a move can drag the price back to $92.693. As the overall sentiment is still fragile, we will prefer to buy on a pullback, rather than buy the breakout.
XLM/USD
After a sharp decline, usually, the pullback reaches the 38.2% Fibonacci retracement level. However, in Stellar (XLM) the rebound fizzled out close to 23.6% retracement level. This is a negative sign as it shows that the bulls are not buying even at these levels. A shallow bounce will encourage the bears to try and sink the altcoin below the $0.056 to $0.051014 support zone.
XLM USD daily chart. Source: Tradingview
If successful, the downtrend will resume. On the other hand, if the bulls defend the support zone, the XLM/USD pair might remain range-bound for a few days. The pair will pick up momentum on a breakout of the moving averages. We suggest traders wait for a bottom to be confirmed before jumping in.
TRX/USD
Tron (TRX) is facing selling close to the 20-day EMA but the positive thing is that the price has not turned down sharply from this resistance. The 20-day EMA is flattening out and the RSI is just below the midpoint, which shows that the selling pressure is easing.
TRX USD daily chart. Source: Tradingview
The next dip towards the support at $0.0136655 will give us better insight on whether the bottom is in place or not. If the TRX/USD pair holds above $0.0136655, it will offer an opportunity to buy as the risk to reward ratio will be attractive.
However, if the bears sink the price below $0.0136655, the drop can extend to the $0.0116262 to $0.011240 support zone.
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.