Fundstrat Global Advisors co-founder Tom Lee believes that Bitcoin does well when the S&P 500 market index moves up. Though Bitcoin might act as a macro hedge against global turmoil in some instances, it has largely performed negatively when the S&P 500 has dropped. It will be interesting to see how Bitcoin moves in the next few weeks.
Bakkt’s launch did not generate the interest it was expected to do, which led some to blame it as the reason for the recent drop in Bitcoin. However, institutional traders do not jump in without testing waters. In a press release, Intercontinental Exchange stated that Bakkt completed its first block trade, executed between Galaxy Digital and XBTO on Oct. 1. Following the trade, XBTO said the platform “can accommodate large trades.”
The dominance of Bitcoin continues to drop, which shows that the action is gradually shifting to altcoins. However, for the altcoins to continue their outperformance, Bitcoin has to either consolidate or move up gradually. In the event of a sharp drop in the leading cryptocurrency, a number of altcoins are likely to follow suit. Let’s analyze the charts of the top performers of the past seven days and try to spot any reliable buy setups.
LINK/USD
Chainlink (Link) is the top performer of the past seven days. It has risen about 25% during the period. This is the second consecutive week that the cryptocurrency has found a place among the top performers. Does it indicate a change in trend? Let’s analyze its chart.
After consolidating between $1.50 and $2.0531 for the past five weeks, the bulls are attempting a breakout above this range. If the LINK/USD pair sustains above $2.0531, it will indicate strength. The next level to watch on the upside will be a move to $2.8498, above which the momentum is likely to pick up. Therefore, we retain the buy recommendation given in the previous analysis.
However, if the bulls fail to sustain the price above $2.0531, the pair might extend its stay inside the range for a few more weeks. The pair will weaken on a break below $1.50. The next support to watch on the downside is $1.3139, which is the 78.6% Fibonacci retracement of the rally.
TRX/USD
In order to find loopholes in their security systems, companies offer bug bounties to hackers to find bugs and submit a vulnerability report. The Tron Foundation is the third-largest spender on such bug bounties trailing EOS and Coinbase.
Major cryptocurrency exchange Binance has frozen 12 billion TRX and has voted itself as the highest-ranked “Super Representative” in the Tron (TRX) ecosystem. While a few have viewed this as a positive, others have objected to this buyout by the industry leader. Can the currency build on its recent pullback? Let’s study its chart.
The TRX/USD pair declined close to the yearly low of $0.01124 the week before. This is a negative sign as it shows that bears continue to sell on minor rallies. If the current pullback fails to scale above the overhead resistance of $0.01774, we anticipate another attempt by the bears to sink the pair to new lows.
However, if the cryptocurrency rises above the overhead resistance, it might face some resistance at the 20-week EMA, which is sloping down. If this resistance is crossed, a move to the 50-week SMA and above it to $0.0409111 is possible. We will wait for the price to scale and sustain above $0.01774 before proposing a trade in it.
EOS/USD
The United States Securities and Exchange Commission has settled charges against Block.one, the parent company behind EOS, with a penalty of $24 million, for conducting an unregistered initial coin offering. In a recent article, a security engineer has raised concerns that the EOS network can be congested using just a few dollar’s worth of EOS. However, Block.one has said that the network is operating “correctly.”
The EOS/USD pair is currently in a downtrend. The bears broke below the critical support of $3.1534 the week before, which shows continued selling pressure. However, the bulls are currently attempting to push the price back above $3.1534. If successful, a move to the downtrend line is possible.
This is a major resistance, above which, the pair can rally to $4.8719. The momentum is likely to pick up above this level. History suggests that the moving averages are unlikely to offer a stiff resistance. Therefore, traders can buy on a close (UTC time) above the downtrend line and keep a stop loss below $2.40.
However, if the bulls fail to scale the price above $3.1534, the bears will try to resume the downtrend and retest the 52-week low at $1.55.
XRP/USD
Ripple has acquired crypto trading firm Algrim which will give it an entry into Iceland, where the company wants to establish an engineering hub. In another announcement, Ripple’s investment arm Xpring has partnered with cryptocurrency payment processor BitPay, enabling businesses to accept XRP payments via BitPay’s cross-border payments platform. Separately, content creators with web monetization platform Coil can now receive XRP funds in real-time, following a tie-up between Coin and GateHub Ltd. Can these string of partnerships and acquisitions boost prices? Let’s analyze the chart.
The XRP/USD pair has formed a descending triangle, which is a bearish setup. Though the price closed (UTC time) below the support at $0.24508, the bears have not been able to capitalize on the breakdown. This shows buying at lower levels.
Currently, the bulls have again pushed the price back above $0.24508. However, the recovery will face resistance at both moving averages and above it at the downtrend line of the triangle. The pair will turn positive if it breaks out of the triangle.
On the other hand, if the price turns down from one of the overhead resistances and plummets below $0.22, the downtrend will resume. We will wait for a new buy setup to form before proposing a trade in it.
ADA/USD
Cardano (ADA) CEO Charles Hoskinson has announced that American footwear brand New Balance will use the Cardano blockchain to authenticate a range of its products. Though it has found a place among the top five performers, has the cryptocurrency bottomed out? Can it build on its gains in the next few weeks? Let’s find out.
The ADA/USD pair plunged to the critical support of $0.035778 the week before. Though the bulls have managed to defend the support, they have not been able to achieve a strong rebound. This is a negative sign as it shows a lack of demand even at these levels.
A shallow pullback is likely to encourage bears to again attempt to break below the support of $0.035778. If successful, a drop to the 52-week low of $0.02830 is possible. If this support also gives way, the pair will start a new downtrend.
However, if the bulls manage to keep the price above $0.035778, a move to $0.0560221 is likely. We do not find any buy setups at the current levels, hence, we remain neutral on the cryptocurrency.
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.
The market data is provided by the HitBTC exchange.