When the price of an asset does not reverse direction from a critical resistance, it indicates that some traders are holding onto their positions in anticipation of a breakout. For the past month, Bitcoin (BTC) has been repeatedly revisiting the $10,000 levels and even though the bulls have not been able to sustain above this level, they have not given up much ground either.
This suggests that traders are accumulating on dips and not closing their positions at $10,000. This is a bullish sign and it increases the possibility of a breakout above the resistance in the short-term.
Crypto market data daily view. Source: Coin360
Before and after the halving, institutional investors have also been building larger Bitcoin positions. As reported by Cointelegraph, crypto fund manager Grayscale has aggressively been buying the top-ranked cryptocurrency on CoinMarketCap and recent reporting shows they also purchased about $110 million worth of Ether (ETH). This strong inflow of funds into the top two cryptocurrencies bodes well for the sector.
The next few days are critical as they will determine whether the crypto market will trend higher or take a break. If Bitcoin rises, these other crypto assets could offer a buying opportunity.
BTC/USD
Bitcoin (BTC) is at a critical juncture. On June 1, the bulls propelled the price above the resistance line of the symmetrical triangle. However, due to lack of follow up buying, the price dipped back into the triangle on June 2.
BTC/USD daily chart. Source: Tradingview
Since then, the BTC/USD pair has been trading between the 20-day simple moving average ($9,423) and the resistance line of the symmetrical triangle. This suggests buying on dips at lower levels.
If the bulls can push the price above the triangle once again, a rally to $10,500 is possible. The bears are likely to defend this level aggressively but if the bulls can scale it, a new uptrend is likely. The pattern target of a breakout of the triangle is $11,778.
This bullish view will be invalidated if the pair breaks below the 20-day SMA. In such a case, a drop to the support line of the symmetrical triangle is possible. Below the triangle, a drop to $8,130.58 is likely. However, the probability of such a fall remains low.
BTC/USD 4-hour chart. Source: Tradingview
The four-hour chart shows that the bulls were able to drive the price above the resistance line of the triangle on two occasions but they could not build up on the breakout. This suggests a lack of demand at higher levels.
However, on the downside, the bulls are not allowing the sellers to sink the price to the support line of the triangle. This is a positive sign. If the price rebounds off the current levels, the bulls are likely to make one more attempt to push the price above the triangle.
If successful, the pair is likely to move up to $10,400–$10,500. Therefore, traders may look for entries above $9,900 and a stop-loss at $9,500. Taking partial profits closer to $10,500 might be wise if the pair struggles to break free of this resistance and the stops on the rest of the position can be kept at breakeven.
If the pair ascends $10,500 levels, it could start the next leg of the sustained up move.
Conversely, if the pair turns down from the current levels and breaks below $9,400, a drop to $9,200 is likely. The bulls will make an aggressive attempt to defend this support zone because if it gives way, a deeper correction is possible.
ETH/USD
Ether (ETH) is in an uptrend and has been trading inside the ascending channel for the past few weeks. Currently, the price is stuck between the 10-day exponential moving average ($235) and the downtrend line.
ETH/USD daily chart. Source: Tradingview
Both moving averages are sloping up and the relative strength index is in the positive territory, which suggests that bulls have the upper hand. If the second-ranked cryptocurrency on CoinMarketCap bounces off the 10-day EMA and breaks out of the downtrend line, the uptrend is likely to continue.
On the other hand, if the bears sink the price below the 10-day EMA, a drop to the 20-day SMA ($223) is possible. However, as the bulls have held the support line of the channel on three previous occasions (marked as ellipse on the chart), a bounce off it can also offer a buying opportunity to the traders.
ETH/USD 4-hour chart. Source: Tradingview
The bears are aggressively defending the downtrend line while the bulls are attempting to keep the ETH/USD pair above $236. If the pair slips below $236, it can drop to $229 and then to the support line of the ascending channel.
If the pair bounces off the support line of the ascending channel, it can offer a buying opportunity to the traders with a close stop-loss kept just below the channel.
Another buying opportunity will open up if the pair bounces off $236 and breaks out of the downtrend line. Traders will likely buy on a close (UTC time) above the downtrend line with a stop-loss below $229. The first target on the upside is $252 and then $270.
A change in trend is likely to be signaled if the pair plummets below the channel. Therefore, bullish positions below the channel should be avoided.
LINK/USD
Chainlink (LINK) broke out of an ascending triangle on June 1. The pattern target of this bullish breakout is $4.9656. However, the altcoin turned around from $4.6185 and is currently retesting the breakout level.
LINK/USD daily chart. Source: Tradingview
If the 14th-ranked cryptocurrency on CoinMarketCap bounces off the 10-day EMA ($4.27) or the breakout level of $4.2129, the bulls will attempt to resume the up move. The moving averages are sloping up and the RSI is in the positive territory, which suggests that bulls have the upper hand.
Conversely, if the bears sink the pair below the breakout level, a drop to the 20-day SMA ($4.11) and then to the trendline of the triangle is possible. A breakdown of the triangle will be a negative sign that will signal a possible change in trend from bullish to range-bound.
LINK/USD 4-hour chart. Source: Tradingview
The four-hour chart suggests that the bulls are struggling to hold on to the higher levels. The moving averages have completed a bearish crossover and the RSI has also dipped into the negative territory, which suggests that bears are attempting to make a comeback in the short-term.
However, the bulls are likely to step in and defend the breakout level of $4.2129 aggressively. If the rebound off this support rises above the downtrend line it will signal a possible resumption of the uptrend.
Opening a position above the downtrend line and keeping a stop-loss below $4.10 might be a reasonable trade setup. The first target objective would be a rally to $4.6185, then $4.9656.
This bullish view will be invalidated if the bears sink the LINK/USD pair below the trendline of the ascending triangle.
ADA/USD
Cardano (ADA) has been in a strong uptrend for the past few days. If the trend is strong, the bulls usually buy the dips to the 10-day EMA ($0.079). Even if this level is broken, the possibility of a bounce off the 20-day SMA ($0.068) remains high.
ADA/USD daily chart. Source: Tradingview
Currently, the 10th-ranked cryptocurrency on CoinMarketCap is witnessing profit booking. However, both moving averages are sloping up and the RSI is close to the overbought zone, which suggests that bulls remain in command.
Therefore, if the price bounces off the 10-day EMA, the bulls will make another attempt to reach the stiff overhead resistance at $0.10. In the past, this level has acted as a strong resistance, hence, the bears are likely to defend it aggressively once again.
If the 10-day EMA breaks down, a deeper correction to the 20-day SMA is possible. Such a fall would signal weakening momentum and increase the likelihood of a range formation for a few days.
ADA/USD 4-hour chart. Source: Tradingview
The four-hour chart shows that the bulls are defending the zone between $0.0839747–$0.0832290 but are struggling to propel the ADA/USD pair above the downtrend line. This suggests that the bears are posing stiff resistance at higher levels.
If the pair rebounds off the current levels and rallies above $0.0901373, it is likely to resume its uptrend. Traders might look at buying half the desired position size after the pair closes (UTC time) above the moving averages and the rest of the position can be added above $0.0901373.
Conversely, if the bears sink the price below $0.0832, a drop to 50% Fibonacci retracement level of $0.0810950 and then to 61.8% Fibonacci retracement level of $0.0789610 is possible. A strong bounce off these levels could also offer a buying opportunity with a close stop-loss.
The bullish view will be invalidated if the bears sink the pair below $0.0789610. Below this support, a drop to $0.0759228 and then to $0.0720527 is possible.
ETC/USD
Ethereum Classic (ETC) turned down at the overhead resistance of $7.62717 on May 31. This shows that the bears are aggressively defending this level. Currently, the altcoin has dropped to the trendline of the ascending triangle.
ETC/USD daily chart. Source: Tradingview
If the 20th-ranked cryptocurrency on CoinMarketCap rebounds off the trendline support, the bulls will probably attempt to push the price back towards $7.62717. A breakout of this level will be a huge positive as it will complete an ascending triangle pattern.
Conversely, if the price breaks below the trendline, a deeper pullback is likely. Below the trendline, a drop to $6 and below it to $5.50 is possible. The 10-day EMA is gradually sloping down and the RSI is just below the 50 level, which suggests that bears are trying to make a comeback.
ETC/USD 4-hour chart. Source: Tradingview
The ETC/USD pair has dropped to the trendline of the ascending triangle. If the pair bounces off this level and rises above $7, traders can initiate long positions with a stop-loss below the trendline.
Traders may look to book partial profits close to $7.60 and trail the rest with a close stop-loss because if the momentum can drive the price above $7.62 the ascending triangle will complete. This bullish setup has a target objective of $9.74.
Conversely, if the bears sink and sustain the pair below the trendline, it will signal weakness. Therefore, traders should avoid buying when the price stays below the trendline.
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.