Bitcoin has been stuck in a tight range for the past few days, while its 14-day volatility plummeted to its lowest level since mid-November.
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Market data is provided by the HitBTC exchange.
The highly-anticipated Bitcoin ETF proposal by VanEck and SolidX partners to list on CBOE's BZX exchange was withdrawn on Jan. 23 due to the ongoing government shutdown. VanEck's founder and CEO, Jan Van Eck, told CNBC that they can allay many of SEC’s concerns but they “can’t have meetings when they’re shutdown.” The proposal will be resubmitted after the shutdown ends. Bitcoin has not reacted to this news, which is a positive sign.
The leading cryptocurrency has been stuck in a tight range for the past few days. Its 14-day volatility plummeted to its lowest level since mid-November, according to U.S. asset manager Blockforce Capital. This period of low volatility will be followed by another expansion in volatility.
Though it is difficult to predict which way the price will escape, analysts at JP Morgan believe that Bitcoin can plunge to $2,400 and below that to $1,260. According to them, using crypto in the real world is a challenge. They could pinpoint any major retailer who accepted crypto in 2018.
Additionally, the analysts do not expect banks to benefit from blockchain technology at least for another three to five years. These forecasts should be taken with a pinch of salt because the investment bank’s CEO, Jamie Dimon has been one of the most vocal high-profile critics of cryptocurrencies.
Cardano’s (ADA) founder, Charles Hoskinson anticipates cryptocurrencies will take more than a decade to reach their 2017 highs. However, by then, he expects the markets to mature and solve most of the problems plaguing it.
Bitcoin (BTC) has been trading close to the $3,500 level since Jan. 11. Attempts to move away from this price level have been unsuccessful. The price is trading below both the moving averages, which are trending down. This shows that sellers have the upper hand.
The downtrend will resume if the BTC/USD pair plunges below $3,236.09. A breakdown will dent the sentiment severely and scare away investors who are waiting on the sidelines to enter.
If the bulls push the price above both the moving averages, a rally to $4,000 and above it to $4,255 is probable. We might suggest long positions if the price sustains above the downtrend line. Until then, we remain in a wait-and-watch mode.
Ripple (XRP) is in a weak downtrend. Both the moving averages are sloping down and the RSI is in the negative zone. This shows that the bears are at an advantage.
The immediate support on the downside is in the $0.30550– $0.31 zone. A break below this zone can plunge the XRP/USD pair to the next support at $0.27795. If that support also breaks, the fall can extend to $0.24508.
The cryptocurrency will show signs of a possible recovery if it breaks out and closes (UTC time frame) above the 50-day SMA. We retain our buy suggested in the previous analysis.
Ethereum (ETH) has not been able to bounce off the strong support at $116.30 for the past few days. This suggests a lack of demand at higher levels.
The 20-day EMA is sloping down and the RSI is in the negative zone. This means the path of least resistance in the short term is to the downside. If the ETH/USD pair closes (UTC time frame) below $116.30, it will turn negative and slide to $100. If $100 also fails to offer support, the next target on the downside is $83.
Our bearish view will be invalidated if the bulls bounce off of current levels and push prices above $134.50. We do not find any reliable buy setups at current levels; hence, we are not recommending any trade in it.
Bitcoin Cash (BCH) has been trading in a tight range of $141–$121.30 since Jan. 11. The next move will start when the price escapes from this range.
A breakout and close above $141 can carry the BCH/USD pair to $177.30 and above it to $239. Therefore, traders can look to buy on a close (UTC time frame) above $141 with a stop just below $115.
However, if the bears sink the cryptocurrency below $121.3, it can correct to $100 and below that to $73.50.
EOS has been trading close to the 20-day EMA for the past four days. Both the moving averages are flat and the RSI is just below the 50 level. This points to a balance between the buyers and the sellers.
The balance will tilt in favor of the bulls if the price breaks out of the moving average and $2.5944. The breakout can result in a rally to the overhead resistance zone of $3.05 to $3.2081.
On the other hand, if the EOS/USD pair turns down from the current level and plummets below $2.1733, it can drop to $1.7746 and below it to $1.55. We shall wait for the price to sustain above $2.60 before suggesting any long positions.
Stellar (XLM) is likely to correct to the yearly low of $0.09285498. A breakdown of this final support will resume the downtrend. The downtrending moving averages and RSI in negative territory suggest that sellers have an upper hand.
If the XLM/USD pair bounces off the support at $0.09285498, it might move up to the downtrend line. A breakout of the 50-day SMA will indicate strength. The cryptocurrency might pick up momentum above $0.13427050. We shall wait for a trend reversal to form before proposing a trade in it.
From the bottom of the tight range, the bulls carried Litecoin (LTC) to the top of the range. A breakout and close above $33 can push it to $36.428, followed by a move to $40. Therefore, we suggest traders keep a stop loss of $27.50 on their long positions.
The LTC/USD pair will turn negative if the bears sink the price below the support zone of $29.349 to $27.701. If this zone breaks, the drop can stretch to the yearly low of $23.090.
A failure to breakout of the range will extend the consolidation by a few more days. The flat moving averages and the RSI close to 50 points to a balance between the buyers and the sellers.
Tron (TRX) is one of the stronger cryptocurrencies. It has been consolidating near the highs of the $0.0183–$0.02815521 range for the past three days.
Consolidation close to a resistance shows that the bulls are in no hurry to book profits. If the buyers push the price above $0.02815521, a new uptrend is likely. The target levels to watch on the upside are $0.03801042 and above it $0.04. We retain the buy recommendation provided in the previous analysis.
Conversely, if the TRX/USD pair reverses direction from current levels, it can correct to the 20-day EMA and below it to $0.02113440.
Bitcoin SV (BSV) continues to trade in a tight range. After this low-volatility period, we expect the volatility to surge.
A breakdown and close (UTC time frame) below $72.055 can result in a drop to $65.031. If this support also breaks, the decline can extend to $57 and below that to $38.528.
Conversely, if the BSV/USD pair breaks out of the 50-day SMA, it will indicate strength and can rally to $102.58, followed by a move to $123.98. A breakout and close above $123.98 will signal the start of a new uptrend.
Cardano (ADA) has not been able to break out of the 20-day EMA for the past four days. This shows that buying dries up at higher levels.
The bears will now attempt to break down of the small uptrend line and the 50-day SMA. If successful, a drop to the support line of the ascending channel is probable. We expect a strong bounce from close to $0.036815.
However, if the ADA/USD pair plunges below $0.035815, a drop to the low of $0.27237 is possible. We do not find any bullish setup at current levels.
Market data is provided by the HitBTC exchange. Charts for analysis are provided by TradingView.