Cryptocurrencies Price Analysis, Jan. 4
- 2019-01-05 03:00 AM
Bitcoin, Ethereum, Ripple, Bitcoin Cash, EOS, Stellar, Litecoin, Bitcoin SV, TRON, Cardano: Price Analysis, Jan. 4
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. 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.
The first ever bitcoin was mined 10 years ago on Jan. 3, 2009. Since then, the original cryptocurrency has been on a wild ride. The naysayers continue to believe that Bitcoin is a scam and it can neither become a currency nor can act as a store of value.
However, the staunch believers still maintain that one day Bitcoin will be used for everyday transactions and will also be preferred as a digital counterpart of gold. Major retail company Overstock.com has announced that it will pay its business taxes with Bitcoin.
Though 2018 has witnessed a sharp fall in prices, it did not deter the large players from betting on digital currencies. Circle has processed 10,000 OTC trades in 2018 and generated a trade volume of $24 billion. This shows that the institutional money is gradually, if slowly, entering the space.
The GTI Vera Convergence Divergence indicator points to higher levels for Bitcoin if the buying pressure continues. Nigel Green, founder and CEO of United Kingdom consulting firm deVere group, expects virtual currencies to be positive in 2019, against the backdrop of increased institutional money inflow.
However, what do the charts predict for the short term? Let’s find out.
The range in Bitcoin has shrunk to $3,660.84–$3,955.6 since Dec. 29. The 20-day EMA has turned flat and the RSI has dipped below 50 levels, which shows that the bulls have surrendered their momentum in the short term.
The BTC/USD pair will pick up momentum on a break out of $4,255, which will complete a head and shoulders pattern. The target of such a move is $5,500, which can extend to as high as $5,900. Therefore, traders can buy on a close above $4,255 with stops at $3,550.
If the bears plunge the virtual currency below $3,550, a fall to $3,236.09 will be on the cards. The downtrend will resume if this support gives way. We anticipate Bitcoin to make a decisive move within the next few days.
The level of $167.32 has been acting as a strong resistance for the past two days. If the bulls succeed in pushing Ethereum above this level, it can rise to $225, followed by a rally to $249.93.
Conversely, if the ETH/USD pair turns down from the current levels, it can slide to $136.12. We anticipate a strong support at this level given that the 20-day EMA is also located close by.
The pair remains on track to scale $167.32 as long as it stays above the 20-day EMA. Any break of the moving averages will be a negative development that can result in a retest of $83. We recommend traders wait for a breakout above $167.32 or a dip to the support levels before initiating any long positions.
Ripple has been trading in a tight range of $0.32615–$0.383 since Dec. 27. A breakdown below this range will result in a drop to $0.27795.
On the other hand, a breakout above $0.4 will complete an inverse head and shoulders pattern, with the next target of $0.52205. Though the resistance line of the descending channel can act as a minor hurdle, we expect it to be crossed. Hence, we retain the buy recommendation provided in the previous analysis.
If the XRP/USD pair breaks out of the $0.565–$0.625 zone, it will move up to $0.7644, which is likely to act as a stiff resistance.
Bitcoin Cash could not break out of the 50-day SMA, which is a negative sign. If the price slips below $141, it can dip to the bottom of the descending channel. A breakdown of the channel will resume the downtrend.
The BCH/USD pair will pick up momentum on a break out and close (UTC time frame) above the 50-day SMA. Such a move will turn the pattern into a bullish flag that has a target of $355.
The flat 20-day SMA and the RSI close to the 50 level suggests a consolidation in the near term. Therefore, traders should wait for a break out of the 50-day SMA before jumping in.
The breakout above the 50-day SMA was short-lived. EOS has dipped back to the 20-day EMA once again. If this support breaks, the slide can extend to $2.1733.
Any break of $2.1733 would be a negative development. It can result in a drop to $1.55. Below this level, the EOS/USD pair will resume its downtrend.
On the upside, $3.2081 is an important resistance, above which a move to $3.8723, followed by a rally to $4.493, is probable.
The bulls are struggling to break out of the 20-day EMA, which is a negative sign. If Stellar plunges below $0.11024826, a fall to the low of $0.09285498 is probable.
The 20-day EMA is gradually sloping down and the RSI has also slipped below 50 levels. This shows that the bears have the upper hand in the short term. The XLM/USD pair will gain strength if it breaks out of $0.15. We shall wait for a trend reversal setup to appear before proposing a trade in the pair.
Though Litecoin broke out of the 50-day SMA on Jan. 2, it could not keep gaining ground. The bears are currently attempting to sink it below the moving averages.
The area of $27.701–$29.349 is a critical support zone on the downside. Any break of this is likely to push the price down to $23.1. The downtrend will resume if this level also breaks.
The LTC/USD pair will pick up momentum if it breaks out of $36.428. We suggest traders wait for a close (UTC time frame) above this level to establish long positions. Until then, it is better to remain on the sidelines because the flattening moving averages and the RSI close to 50 levels point to a consolidation in the near term.
Though the broader range in Bitcoin SV is $80.352–$123.98, it has been stuck in a tight range of $80.352–$102.58 since Dec. 26.
Usually, when the range gets small, it is an indication of an impending breakout or breakdown. It is difficult to predict which way the chart will move when it does. Therefore, it is best to wait for the breakout before buying.
If the BSV/USD pair breaks out of $102.58, it can move to $123.98. If this level is also crossed, it can then rally to $167.608. Therefore, traders can buy on a close above $102.58 with the stops at $80.
On the other hand, if the digital currency slides below $80, it can fall further to $65.031 and below that to $38.528.
The bulls could not sustain the breakout on Jan. 3, but TRON has not given up ground, which suggests buying at lower levels. The 20-day EMA continues to slope up, which is a bullish sign.
The breakout above the downtrend line can carry the TRX/USD pair to the next level of $0.0246. If this level is scaled, it can rise to $0.02815521. Traders who initiated long positions based on our earlier suggestion can keep holding onto them with the stops at $0.018.
Our bullish view will be invalidated if the price breaks below $0.018 because after that the cryptocurrency might fall to the 50-day SMA and below that to $0.013.
Cardano has been trading near the neckline for the past two days. The moving averages have completed a bullish crossover. If the bulls can scale the neckline within a couple of days, the chart will complete an inverse head and shoulders pattern, with a target of $0.066.
Traders can buy on a close above the neckline, but If the price does not break out of $0.060105 quickly, the stops should be raised.
If the ADA/USD pair does not break out of the neckline soon, it will be likely to turn down and drop below the moving averages. A breakdown of $0.036815 will result in a retest of the lows.