The crypto markets keep struggling amidst a similarly mixed outlook from the regulators – the industry still has a long way to go.
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The market data is provided by the HitBTC exchange.
Germany’s Minister of Finance Olaf Scholz believes that cryptocurrencies are not yet ready ro replace traditional fiat money, but he is not so confident about “20 to 30 years” into the future. This is a bullish sign, which confirms that the world is gradually coming to terms with the fact that cryptocurrencies are here to stay.
Yet, China continues to “remind” investors about the risks associated with Initial Coin Offerings (ICOs) and crypto trading. A committee of lawmakers in the UK has urged the regulators to act by introducing measures for consumer protection.
In the U.S., a study by the New York Attorney General’s office has found that many cryptocurrency exchanges lack sufficient customer protections, and have “serious conflicts of interests.” The report observed that only a few crypto trading platforms have market surveillance capabilities to deter trading manipulation.
A robust system is needed to attract large players, who are accustomed to the traditional exchanges that have many protective measures built in against market manipulation and fraud. Price volatility, however, might remain for even longer time as the market matures.
Over the past several months, we have shown how the traders can keep their risks low when trading cryptocurrencies. Let’s see if we can spot any buy setups today.
Bitcoin has held $6,200 for the past two days, but is struggling to move up. Both moving averages are sloping down and the RSI is also in the negative territory. This shows that the sellers are in command.
A break of the $5,900–$6,075.04 support zone will complete two negative formations, a head and shoulders pattern and a descending triangle pattern. Though head and shoulders is primarily a reversal pattern, it can also work as a continuation pattern, as is the case currently.
The lower levels that can offer some support are $5,450 and $5,000. However, after a break from such a major support, a number of stops will be hit, resulting in a quick drop. Therefore, we suggest traders avoid catching the falling knife if $5,900 breaks down.
If the bulls defend the support zone and push price above the moving averages, the BTC/USD pair can rally to $6,900 and $7,400. We suggest an aggressive buy on 50 percent of the desired position size on a close (UTC time frame) above $6,600.
The remaining positions can be added after the digital currency closes above the downtrend line of the descending triangle.
The trend in Ethereum is still a downward one, but we find some buying interest around the $183–$192 area. However, on the upside, the 20-day EMA is proving to be a major resistance as the bulls have failed to scale this level for the past four days.
If the bulls break out of the 20-day EMA, a move to the 50-day SMA is likely, with minor resistance at the downtrend line of the descending channel. We shall turn bullish if the price sustains above the channel for three days in a row.
If the ETH/USD pair turns down from the current levels, it can slide to $192 and further to $183. The pair is at a critical level and we should get a clearer picture within the next couple of days.
Ripple bounced sharply from $0.27 on September 18 and broke out of the 20-day EMA. Currently, it is facing resistance at the 50-day SMA.
If the bulls break out of the 50-day SMA, the next resistance is at $0.37390. The downtrend line is also located just above this level. If the XRP/USD pair sustains above the downtrend line, we can expect the trend to change from down to up.
If buying dries up at higher levels, the virtual currency might spend some more time inside the range of $0.27–$0.37390. Though the bounce from the lows is a positive development, we shall wait for additional evidence before suggesting any trades on it.
When the sentiment is negative, any uncertainty drives away the investors and that is what seems to be happening with Bitcoin Cash. With a looming split, the buyers are not taking any fresh positions, which has kept the cryptocurrency near its year-to-date lows.
The trend is down, as both moving averages are sloping downward and the RSI is in the negative territory. A break of the September 11 low of $408.0182 will resume the downtrend and the BCH/USD pair can slump to the next support zone of $280–$300.
The bulls have to overcome the resistance from the 20-day EMA, the 50-day SMA and the downtrend line of the descending channel to signal a change in trend.
EOS has been holding above $4.4930 since August 17. If this support breaks, the slide can extend to the next support at $3.7823. Therefore, traders can keep their stops on the remaining long positions at $4.4.
On the upside, the bulls have been facing a stiff resistance at the 20-day EMA and $5.65. The EOS/USD pair will gain strength if it breaks out of $5.65.
Though the 50-day SMA is sloping down, the 20-day EMA is trying to flatten out. The RSI continues to be in the negative area. This shows that the virtual currency is in a range but with a negative bias.
Stellar has formed a range inside a range. Since September 11, it has been trading inside the range between $0.184 and $0.21489857. If the bulls break out of this range, a rally to the top of the large range of $0.184–$0.24987525 is probable.
The critical level to watch on the downside is $0.184. If the XLM/USD pair breaks and sustains below the range it will complete a descending triangle pattern, which is a negative sign.
On the other hand, if the bulls break out of the range and the downtrend line of the descending triangle, it will invalidate the bearish pattern, which is a bullish sign. We shall wait for the virtual currency to show some strength before recommending any trades on it.
The bulls defended the critical support on September 18, but the pullback is facing resistance at the downtrend line and the 20-day EMA. Currently, Litecoin is consolidating in a large range of $49.466–$69.279 – a process, which began August 8.
The LTC/USD pair will resume its downtrend if it sustains below $47.246. The next support on the downside is between $40 and $44.
On the upside, the virtual currency can rally to $69.279 if it breaks out of the moving averages. We might suggest a long position on a break out of the range because it will indicate a probable double bottom.
Cardano broke out of the tight range of $0.060105–$0.071355 but is finding it difficult to sustain the higher levels. Currently, the price has dipped back into the range.
Both moving averages are trending down and the RSI is in the negative zone. The trend remains headed downward. The ADA/USD pair will have to enter a bottoming formation before a change in trend can be confirmed.
Until then, any pullback attempts will face resistance at the moving averages. The downtrend will resume if the bears force a break down from the range.
The bulls are trying to defend the support at the moving averages but are finding it difficult to break out of $120. Monero has turned volatile and trendless in the past few days, as both moving averages have flattened out and the RSI is close to the neutral territory.
A symmetrical triangle is developing close to the bottom. A break of the trendline of the triangle will be a bearish development. It will increase the probability of a retest of $76.074, though the pattern targets are way lower. We suggest holding the long positions with the stops at $95.
On the upside, the XMR/USD pair will face resistance at the downtrend line and at $122.6. It will attract buyers only after these two resistances are crossed.
IOTA has been range bound between $0.5 and $0.6170 since September 6. The 50-day SMA and the downtrend line are also close to the upper end of the range. Hence, $0.6170 will act as a stiff resistance. The cryptocurrency will show strength if it can break out of this resistance.
The 50-day SMA is sloping down and the 20-day EMA is also starting to turn down, after trying to flatten in the past few days. This shows that the path of least resistance is to the downside.
A break of the $0.5 support can sink the IOTA/USD pair to $0.45 and further to $0.4. Traders can keep the SL of $0.46 on the long positions.
The market data is provided by the HitBTC exchange. The charts for the analysis are provided by TradingView.