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The market data is provided by the HitBTC exchange.
On August 21, at 01:00 AM UTC time, Bitcoin prices surged, breaking out of the overhead resistance at $6,617.5. Within 20 minutes, Bitcoin spiked from $6,459.5 to $6,827.5, topping out at $6,888.32, an hour later.
The upward move coincided with the scheduled maintenance on BitMEX and looks to have been a short-term trade. However, a breakout above $6,617.5 is likely to have triggered stops on the short positions that had reached a four-month high on August 21. However, it is still too early to confirm if the trend has changed or not.
The Winklevoss twins have founded a self-regulatory organization, the Virtual Commodity Association, that aims to improve transparency among its members. Currently, it has four members, which will meet in September to set the rules and guidelines for the association.
This is another positive step that might allay some of the apprehensions of the U.S. Securities and Exchange Commission (SEC) regarding a Bitcoin exchange-traded fund (ETF). Two Bitcoin ETF proposals will come up for consideration this week and a few others in September. The SEC’s ruling will decide the next short-term trend for the cryptocurrencies.
Should the traders initiate long positions or should they remain on the sidelines? Let’s find out.
On August 21, the bears attempted to sink Bitcoin but the bulls bought the dip to $6,000, which is a positive sign. Today, the breakout of the overhead resistance of $6,617.5 resulted in a spike to $6,888.32, which triggered our buy proposed in the previous analysis at $6,750. However, the bulls could not hold on to the higher levels.
The bears have pushed prices back below the critical support at $6,617.5. This shows that the short sellers are pouncing on any short-term rise. The BTC/USD pair is likely to witness a few more days of range bound trading. The bears will make another attempt to break down of the critical support zone of $5,900-$6,000 within the next few days. If this support breaks, our assumption of a large range on the pair will be invalidated.
On the upside, $6,617.5 is the critical level to watch out for because the downtrend line of the descending triangle, the horizontal resistance and the 20-day EMA all converge at this point. If prices sustain above this level, the bulls are likely to make another attempt to break out of the 50-day SMA.
We suggest traders hold the long positions with the stop loss at $5,900. They can add the remaining 50 percent of the position after the cryptocurrency sustains above $7,000.
Ethereum is in a downtrend with both moving averages sloping down. It is struggling to even pull back to the 20-day EMA, which is a bearish sign.
If the bears succeed in breaking below the support zone of $249.93-$269.78, the ETH/USD pair can slump to $200.
On the upside, a breakout of the 20-day EMA can result in a rally to $358, which will act as a stiff resistance. The pair has not broken out of the 50-day SMA since May 24 of this year, hence, a break out of the 50-day SMA will indicate a change in trend.
The traders should wait for a buy setup to form before initiating any long positions.
The pullback on Ripple is facing resistance at the 20-day EMA and the bulls are struggling to sustain above the moving average. If this level is crossed, the bulls will again face selling pressure at the downtrend line 2 and above that at the 50-day SMA.
Once the bulls scale above the 50-day SMA, the XRP/USD pair can move up to $0.5, where it will again face resistance from the downtrend line 1.
The bulls are defending the $0.31 level on the downside. If this level breaks, a fall to $0.27255 and thereafter a retest of the lows at $0.24508 is probable.
We shall wait for some buying to return before turning bullish.
Bitcoin Cash has been trading between $500 and the 20-day EMA since August 15. If the bears sink the prices below $500, a retest of the $473.9060 line is probable.
On the other hand, if the bulls break out of the 20-day EMA, a rally to the downtrend line is likely. We shall turn positive if the BCH/USD pair sustains above the downtrend line for a couple of days.
Until then, it is best to remain on the sidelines.
EOS broke out of the downtrend line but could not cross the 20-day EMA. The bears have again pushed the prices back below the downtrend line. On the downside, the support is in the zone of $3.8723-$4.1778.
The EOS/USD pair has not broken out of the 50-day SMA since June 10. Hence, it is likely to act as a strong resistance. Once the bulls scale the 50-day SMA, a rally to $9 and thereafter to $11.6 is possible.
Our buy recommendation made in the previous analysis stands cancelled. We shall wait for the price to sustain above the 50-day SMA before proposing any trades.
Though the bulls have managed to defend the long-term support line of $0.184, they have not been able to push Stellar above $0.25 since August 5.
The XLM/USD pair has a history of consolidating near the bottom of the range before embarking on an upward move. We see a similar setup developing this time.
The probability of a rally will increase if the bulls push the prices above $0.25. Therefore, we maintain the buy recommendation made on August 15. Our assumption will be negated if the bears break below the critical support at $0.184.
Litecoin has been consolidating in a tight range of $49.318-$62.319 since August 10. Both moving averages are still sloping down, which shows the advantage the bears have.
A breakout of the range will result in a rally to the downtrend line, which is just above the 50-day SMA. We expect a strong resistance at that level. The first sign of a change in trend will be when the LTC/USD pair sustains above the downtrend line.
If the bears break down of the range, the decline can extend to $40. As the virtual currency has been in a strong downtrend in 2018 so far, we shall wait for it to form a bottoming pattern before suggesting a long position in it.
Cardano has been struggling to climb above the overhead resistance of $0.111843. It has been stuck in the range of $0.083192-$0.112598 for the past eight days.
If the bulls break out of the 20-day EMA and the $0.111843 line, a rally to the downtrend line is probable where it might face a stiff resistance. If the bulls sustain above the $0.15 mark, it will indicate a likely change in trend.
On the downside, if the bears sink the ADA/USD pair below $0.083192, a fall to $0.078 is probable.
We shall wait for the trend to change before suggesting any long positions on it.
For the past five days Monero has been trading close to the 20-day EMA, which is a positive sign. If the bulls force a break out of the overhead resistance, a rally to the 50-day SMA, which is close to the long-term trendline resistance, is likely.
If the XMR/USD pair breaks below $91, a retest of the lows at $76.074 is likely. Though the trend remains negative, the flattening 50-day SMA points to a probable range bound action for a few days.
We shall turn positive on the cryptocurrency after it breaks out of the downtrend line at $120. We don’t find any reliable buy setups at the current levels, hence, we suggest remaining on the sidelines.
IOTA has been consolidating in a tight range of $0.4628-$0.5750 for the past five days. The 20-day EMA is also placed just above the range.
A break out of the 20-day EMA can result in a rally to the 50-day SMA, which is close to $0.85. This offers an opportunity for a quick short-term trade.
Traders can buy the IOTA/USD pair on a close (UTC time frame) above $0.58 with the stop loss at $0.46. Profits can be booked closer to the $0.82-$0.85 range. We anticipate a strong resistance at the $0.9150 mark.
If the virtual currency breaks down of $0.4628, it can slide to the August 14 lows of $0.4037.
The market data is provided by the HitBTC exchange. The charts for the analysis are provided by TradingView.