After the rout last week, most asset classes have started the week with a rebound. The total crypto market capitalization has bounced from the recent lows of about $240.7 billion to $251 billion at press time. The strength of the rebound will confirm whether a bottom is in place or if this is a dead cat bounce after which the down move will resume.
With the recent fall in Bitcoin, the price action has been exactly following the popular stock-to-flow Bitcoin price forecasting model designed by PlanB. He expects the price to average about $8,650 until Bitcoin’s halving in May. It would be interesting to see how Bitcoin behaves if the coronavirus scare persists.
Daily cryptocurrency market performance. Source: Coin360
According to data from Skew, CME Bitcoin futures volume has plunged from $1.1 billion on Feb. 18 to $204 million on Feb. 28 and the open interest has dropped from $329 million to $210 million during the same period. This suggests that speculative volume has reduced and the short-term traders are likely to have closed their positions. However, the remaining open interest indicates that investors are still holding on to their positions.
Can the bulls build on the relief rally that is in progress in most cryptocurrencies? Let’s watch out for the critical levels that will signal the resumption of the up move.
BTC/USD
Though Bitcoin (BTC) broke below the 200-day SMA on Feb. 28, the bears have not been able to capitalize on the breakdown. The failure to drag the price to the next support zone of $8,240.67-$7,856.76 shows a lack of sellers at lower levels.
BTC USD daily chart. Source: Tradingview
Currently, the bulls are attempting to sustain the price above the 200-day SMA. If successful, this would indicate buying at lower levels.
As the 20-day EMA is sloping down and the RSI is in the negative zone, the advantage is with the bears. Therefore, we anticipate the relief rally to face resistance at the 20-day EMA. If the price turns down from the 20-day EMA once again, the bears will try to sink the BTC/USD pair to $7,856.76.
Conversely, if the bulls can propel the price above the 20-day EMA, a move to $10,000 is possible. If the price sustains above the 200-day SMA for three days, we might suggest long positions once again.
ETH/USD
Ether (ETH) is attempting a reversal from $209.95 levels. If the bulls can push the price above the 20-day EMA at $237.33, which is just above the horizontal resistance at $235.70, it will suggest buying at lower levels.
ETH USD daily chart. Source: Tradingview
If the ETH/USD pair sustains above the 20-day EMA, the possibility of a move to $288.599 increases. Therefore, we might suggest long positions after the price climbs above $237.
Alternatively, if the bulls fail to propel the price above the 20-day EMA, the bears will make one more attempt to sink the price back below $209.95. If successful, a drop to $197.75 is likely.
XRP/USD
The bulls have successfully held the $0.22 levels for the past few days. This has encouraged buying by the aggressive bulls. XRP is now likely to move up to the moving averages and above it to the neckline of the head and shoulders (H&S) pattern. We anticipate the bears to aggressively defend $0.25-$0.26362.
XRP USD daily chart. Source: Tradingview
If the altcoin turns down from the 20-day EMA, the bears will try to resume the correction and drag the price below the support at $0.22. If successful, a drop to $0.18043 is possible.
Conversely, if the bulls can carry the XRP/USD pair above the moving averages and the neckline of the H&S at $0.26362, it will indicate an end to the downtrend. If the price sustains above $0.26362, we might suggest long positions once again.
BCH/USD
The bears have failed to sink and sustain Bitcoin Cash (BCH) below the support at $306.78. This is likely to attract aggressive bulls who might attempt to trade the relief rally. If the bulls can push the price above the descending channel, a move to $360 is possible.
BCH USD daily chart. Source: Tradingview
We expect the bears to mount a strong defense at $360. If the BCH/USD pair turns down from $360, it might again dip to $306.78. If this level holds, the pair might remain range-bound for a few days.
However, if the bulls can drive the price above $360 and sustain it, a move to the next levels of $400 and above it to $430 is possible. If both these levels are scaled, the next target would be $500. We might suggest long positions on a close (UTC time) above $360.
BSV/USD
Though Bitcoin SV (BSV) stayed below the support at $236 for the past four days, the bears could not break the psychological support at $200. This shows buying at lower levels. Currently, the bulls are attempting to sustain the price above $236.
BSV USD daily chart. Source: Tradingview
If successful, a move to the 20-day EMA is possible, which is likely to act as a stiff resistance once again. If the BSV/USD pair turns down from this level, the bears will make another attempt to sink it below $200.
Conversely, if the bulls can propel the price above the 20-day EMA, a move to $301.43 and above it to $337.80 is possible. We will wait for a new buy setup to form before proposing a trade in it.
LTC/USD
Litecoin (LTC) has been trading close to the 200-day SMA for the past few days. The bulls are currently attempting to sustain the price above the 200-day SMA. If successful, a pullback to $66.1486 is possible.
LTC USD daily chart. Source: Tradingview
With the 20-day EMA sloping down and the RSI in the negative zone, the advantage is with the bears. Therefore, we expect the bulls to hit a barrier close to the 20-day EMA at $67.25. If the price turns down from this level, the bears will make another attempt to sink the LTC/USD pair below the 200-day SMA.
If successful, a drop to $50 will be on the cards. Conversely, if the bulls can scale the price above the 20-day EMA, a rally to $80.2731 is possible.
EOS/USD
The bulls have kept EOS above the 200-day SMA for the past few days. This is a positive sign as it shows buying closer to this level. If the bulls can sustain the price above the downtrend line, a move to $4 is possible.
EOS USD daily chart. Source: Tradingview
We expect strong resistance at $4. If the EOS/USD pair turns down from this level, the bears will again attempt to sink the price below the 200-day SMA.
Conversely, if the bulls can push the price above $4, a move to $4.5 and above it to $4.8719 is possible. We might suggest long positions after the price sustains above $4 for three days.
BNB/USD
A tough tussle has been going on between the bulls and the bears at the 200-day SMA. Currently, the bulls are attempting a bounce off the 200-day SMA. If successful, Binance Coin (BNB) can move up to the resistance line of the descending channel.
BNB USD daily chart. Source: Tradingview
A break above the descending channel will indicate that the downtrend might be over. Above the channel, a move to $21.80 is possible.
If the BNB/USD pair rises above $21.80, a move to $23.5213 and above it to $27.1905 is likely. On the other hand, if the price turns down from the resistance line of the channel, the bears will attempt to sink the price to $16.4288. We will wait for the price to sustain above the channel before recommending a trade in it.
XTZ/USD
The failure of the bears to sustain Tezos (XTZ) below the 50% Fibonacci retracement level of $2.6025 shows that investors are unwilling to sell at lower levels. If the altcoin can climb above $3.011, the uptrend will resume.
XTZ USD daily chart. Source: Tradingview
The first target on the upside is $3.50 and above it $3.9499. If the XTZ/USD rises to new lifetime highs, a move to $5.3735 is possible. We suggest traders buy on a close (UTC time) above $3.011 with stops at $2.50.
Contrary to our assumption, if the price turns down from the 20-day EMA at $2.88 or from $3 and plummets below $2.50, a drop to $2.28451360 and below it to $1.831 is possible.
LINK/USD
Chainlink (LINK) turned down from $4.3535 on Feb. 29 but the bulls purchased the dip close to the 20-day EMA at $3.88. This is a positive sign as it shows that buyers are not waiting for a deeper fall to get in.
LINK USD daily chart. Source: Tradingview
If the bulls can push the price above $4.3535, a retest of the highs at $4.8671 is possible. A breakout to new highs will be a huge positive as it will open the doors for a further rise to $5.6934.
Contrary to our assumption, if the bulls fail to scale the price above the overhead resistance levels, the XTZ/USD pair might remain range-bound for a few days. Though we are bullish, we do not find a buy setup with a good risk to reward ratio, hence, we are not suggesting a trade in it.
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.