Despite positive news about institutional interest in digital currencies, many major cryptos remain range-bound.
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The inflows to crypto investment firm Grayscale have topped $330 million year-to-date, which is the highest since the firm started operations five years ago. A breakdown of the investor profile shows that a major chunk of the money came from the institutions, which is of note given the prevailing bearish sentiment throughout the year.
Morgan Stanley has categorized cryptocurrencies as a “new institutional investment class” in its report titled "Bitcoin Decrypted: A Brief Teach-In and Implications." Though institutional money has started to flow in, it has been minuscule. Many believe that approval of Bitcoin ETFs will pave the way for investments by institutional traders.
However, Reggie Browne, senior managing director and head of ETF trading at financial services firm Cantor Fitzgerald, believes that Bitcoin ETFs will become a reality only after a strong regulatory framework is in place for the asset class.
Market manipulation is also an important factor that dents the credibility of cryptocurrencies. NASDAQ, the second-largest stock exchange in the world, is confident that its market surveillance technology can prevent manipulation. If successful, this will provide a major boost to the crypto trading community.
Bitcoin dipped close to the first support of $6,212 on Oct. 31 where buying emerged. Prices are currently moving towards the moving averages, which will act as a stiff resistance. If the bulls scale above the moving averages, a rally to the top of the range at $6,831.99 is probable.
The BTC/USD pair will signal a trend reversal above $6,831.99. The new uptrend can push prices to $7,400 and above it to $8,400.
If the bears defend the moving averages, the virtual currency will attract selling that can drag it to $6,200. If this support breaks, a retest of $6,075–$5,900 will be in the cards. A breakdown of $5,900 can result in panic selling, quickly dragging prices to $5,450 and $5,000 levels. Therefore, we suggest maintaining the stops at $5,900.
It is difficult to predict which way the price will escape. Therefore, we have provided the critical levels to watch out for on both sides.
The bulls defended the $188.35 level on Oct. 31. Currently, Ethereum is attempting to break out of the 20-day EMA, which is flattening out. Above this level, the 50-day SMA might act as a strong resistance. If the bulls close (UTC time frame) above the 50-day SMA, a quick rally to $249.93 will be in the cards.
We anticipate a trend reversal above $250. Therefore, traders can buy on a close (UTC time frame) above $250 with the stop at $188. The first target is a move to $322.
If the ETH/USD pair turns down from either of the overhead resistances and breaks $188, it can retest the support at $167.32, below which the fall can extend to $136. We suggest traders wait for the breakout before initiating any long position because the price action inside the range can be random and volatile.
Ripple has been gradually moving higher for the past three days, reaching close to the top of the tight range.
If the tight range resolves to the upside, the bulls are likely to buy, pushing prices higher to $0.55 and $0.62. Therefore, we retain our buy recommendation provided in the previous analysis.
Our bullish view will be invalidated if the XRP/USD pair breaks down of the tight range. Such a move can push prices to the next support zone of $0.38838–$0.37185.
The bulls have pushed Bitcoin Cash back into the triangle. Failure of the bears to capitalize on the breakdown of the symmetrical triangle is a bullish sign. It shows that lower levels are attracting buyers and the owners are unwilling to sell their holdings below a certain price.
If the bulls carry the BCH/USD pair above $500, it will indicate strength and a rally to $600, followed by a move to $660 is possible. Traders can protect their long positions with the stops at $400.
The digital currency will resume its downtrend if the price breaks down from $408.0182. The next support on the downside is at $300.
The bulls have again managed to hold the support at $5. Currently, EOS has risen back to the moving averages, both of which are flat. The RSI has also recovered to the midpoint.
The EOS/USD pair might consolidate between $5–$6 for some more time. A break out of this range can carry the digital currency to $6.8299, whereas, a breakdown can sink it to $4.493.
We expect a new uptrend to start if the price sustains above $6.8299. Traders who are holding long positions can keep their stops at $4.90.
The bulls held the trendline support on Oct. 31. Currently, Stellar is attempting to scale above the moving averages. The zone between $0.24 and $0.27 might offer stiff resistance.
A breakout of $0.27 will invalidate the bearish descending triangle pattern, which is a bullish sign. Therefore, traders can buy on a close (UTC time frame) above $0.27 and keep a stop loss at $0.20, which can be raised later. The target objective is $0.36, with minor resistance at $0.304.
Our bullish view will be negated if the XLM/USD pair fails to break out of the overhead resistances. On the downside, a break of the trendline can result in a fall to $0.205 and $0.184.
Litecoin has held the support zone of $49.466–$47.246 for the fourth time. Though the bulls are succeeding in holding the supports, they are unable to push prices higher. Every bounce has made a lower high (shown as rectangles on the chart). So, the bears might again offer resistance at the moving averages and the downtrend line of the descending triangle.
As the support has been holding up quite well, aggressive traders can bet on the long side above the 20-day EMA, keeping the stop at $47. The first target is a move to the downtrend line where partial profits can be booked. A breakout of the downtrend line of the descending triangle will increase the probability of a rise to the top of the range at $69.279. This is a risky trade, so traders can keep the position size 50 percent of the usual. Swing traders and positional traders can avoid this trade.
Our bullish view will be invalidated if the LTC/USD pair breaks down of $47.246. Below this level, the next support lies at $40.
The bulls are attempting to bounce off the support at $0.068989. Cardano is likely to face resistance at the 20-day EMA and the trendline of the symmetrical triangle. A failure to scale this level might attract another round of selling that will retest the immediate support of $0.068989.
If the support breaks, the ADA/USD pair can slide to the next support at $0.060105. On a break above the moving averages, a rally to the top of the range at $0.094256 is possible. We shall propose a long position when a new buy setup develops.
The bounce from the support at $100.453 has reached the 20-day EMA, which is acting as resistance. Both the moving averages are flattening out, which suggests that Monero might remain range bound for a few more days.
Our view will be invalidated if the bears breakdown and close (UTC time frame) below the support at $100.453. Such a move can plunge the XMR/USD pair to the next support at $81.
On the other hand, a breakout of the 20-day EMA will push prices to the 50-day SMA, above which a rally to $150 is probable. We do not find any reliable buy setups at current levels, so we are not proposing any trades.
TRON has pulled back towards the moving averages, both of which are flat. This shows that the range bound action is likely to continue for a few more days.
The next directional move will start either on a breakout of the range or on a breakdown from it. If the TRX/USD pair breaks out of $0.02815521, we anticipate a rally to $0.0415. Traders can buy after the price scales $0.03.
On the downside, a breakdown of the range will resume the downtrend that can sink prices to the next support at $0.01095383.
Market data is provided by the HitBTC exchange. Charts for analysis are provided by TradingView.