Bitcoin, Ethereum, Ripple, Bitcoin Cash, EOS, Litecoin, Cardano, Stellar, IOTA: Price Analysis, June 01
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The market data is provided by the HitBTC exchange.
The market capitalization of the crypto world has increased by about $25 billion since May 29. The Italian political crisis and the probable escalation of a trade war have attracted investors back into cryptocurrencies.
Dan Morehead, founder of Pantera Capital Management believes that Bitcoin has made a bottom for the year. He proposes to buy now when the prices are still low, to benefit from the ensuing rally in the next few months. We have been voicing a similar opinion for the past few days but we believe that the purchases should be staggered to take advantage of the volatility.
Bitcoin continues to be the undeniable leader. It sets the direction that is followed by most altcoins. Brad Garlinghouse, CEO of Ripple believes that once the crypto markets mature, they will start differentiating between the digital currencies and the correlation with Bitcoin will reduce. He, however, warned that 99 percent of the virtual currencies in circulation will vanish in about a decade. Only the ones that solve a real problem will remain.
There have been a few complains that we don’t mention the fundamentals in our analysis. In technical analysis, we believe that the charts discount all the fundamental news. Hence, we only read the patterns on the chart and try to forecast the probable direction. In the past few months, these patterns have kept us on the right side of the trade and have helped us avoid large losses. We try to avoid trading during major events, due to the uncertainty.
Let’s see, what direction are the charts pointing to today.
We believe that Bitcoin is trading in a large range of $6,075.04 to $12,172.43. The strategy to trade such a large range is to buy near the bottom and sell close to the top. So, we have been waiting to buy on a sharp dip below $7,000, as close to the bottom of the range as possible, so that our risk is less. If the $6,075.04 level breaks, the digital currency can fall to $5,450 levels.
The BTC/USD pair is presently facing resistance at the downtrend line. Even if this level is crossed, it will again face resistance close to the 20-day EMA. Once this level is crossed, a move to the 50-day SMA is possible.
We retain our preference to buy on a sharp dip but only after the fall is arrested. Therefore, we suggest waiting for a couple of days to get better clarity.
Ethereum has been gradually rising, moving towards the 20-day EMA where it will face a stiff resistance. Just above the 20-day EMA is the resistance line of the descending channel and the 50-day SMA, which will also act as a major hurdle.
On the downside, the intraday low of May 28 at $492.5 will act as a strong support. If this level holds, we shall consider long positions but if the level breaks, a fall to $464.65 is probable.
We don’t find any buy setups at the current levels, hence, we are not proposing any trade on the ETH/USD pair.
Ripple formed a doji candlestick pattern on May 30 and followed it up with an insider day candlestick pattern on May 31. Today also, the digital currency is on track to form a doji. This shows uncertainty among the traders.
The XRP/USD pair fell below the 20-day EMA on May 08 and has sustained below it ever since. If the next dip holds above $0.54, it will indicate buying at lower levels. We suggest waiting for this retest to hold before buying on a rebound above the 20-day EMA.
If the bears break below $0.54, the decline can extend to $0.45.
Bitcoin Cash has not been able to find buyers after rising above the downtrend line. It formed a doji on May 30, followed it up with an inside day on May 31 and is likely to make another doji today.
The BCH/USD pair has a tendency to trade in a tight range for a few days before making a decisive move.
On the upside, the 20-day EMA will act as a resistance, above which a rally to the 50-day SMA is possible.
On the downside, $878 and $750 are the supports to watch out for. We suggest waiting for the price to sustain above the 20-day EMA for initiating any long positions.
EOS has a major event coming up on June 02 with its Mainnet launch. It is difficult to predict the price action after such an important event. Due to the uncertainty, we shall not suggest any trade on it. However, we shall mention the important levels to watch out for, both on the upside and the downside.
Since May 23, the EOS/USD pair is stuck in a range between $10.3384-$12.9870. A breakout and close above $13 gives it a minimum target objective of $15.6356, which can extend to $18.67 because there is no major resistance once $15.15 is crossed.
On a breakdown from the range, the digital currency can slide to $7.6898.
Litecoin is struggling to find buyers even at the current levels. It has failed to break out of the downtrend line for the past two days.
The LTC/USD pair has strong resistances between the downtrend line and $127. We shall turn positive only if the bulls succeed in breaking out of $127. Above this level, the digital currency should quickly move up to $140 and above it to the downtrend line of the descending triangle at $158 levels.
If the digital currency fails to rally above $127, it will remain range bound between $107-$127 for the next few days.
We shall wait for a breakout and close (UTC time frame) above $127 before recommending a long position.
The 20-day EMA and the horizontal line at $0.23 are acting as a strong resistance. If the bulls succeed in breaking out of this level, Cardano should pick up momentum and rally to the 50-day SMA and above it to $0.35. The traders can enter long positions on a close (UTC time frame) above $0.23 and the stops can be kept below the May 28 intraday lows.
If the ADA/USD pair returns from the current levels, it will find a strong buying support at $0.17. If the level fails to hold, it can slide to the bottom of the range at $0.13.
We suggest buying only 50 percent of the desired allocation above $0.23 because volatility will remain high inside the range.
Stellar has sustained above the downtrend line for the past three days, which is a positive indication. It is facing resistance at the 20-day EMA but has not given up much ground, which shows that the bulls are not keen to book profits at this level.
On a close above the 20-day EMA, the XLM/USD pair should rally to the 50-day SMA, followed by a move to $0.385. The traders can initiate long positions once the price closes (UTC time frame) above the 20-day EMA. The stop loss can be kept below the recent lows.
On the downside, a break below the May 29 intraday low of $0.24288 can sink the digital currency to $0.184.
Contrary to our expectation, IOTA easily broke out of $1.63 and the 20-day EMA on May 31. It is currently at the 50-day SMA but considering the strong momentum, it looks like the rally will extend to $2.2117. We anticipate a strong resistance at $2.2117 levels. Any correction from $2.2117 will have a strong support at $1.63.
If the bulls force a break out of $2.2117, likelihood of the start of a new uptrend increase, which has a minimum target objective of $3.5084. There is a minor resistance at $2.6977 but we believe that it will be crossed this time.
Therefore, we shall wait for a break out of $2.2117 levels or wait for a dip to $1.63 levels to enter long positions. We don’t find any trade setup at the current levels; hence, we are not suggesting a trade on the IOTA/USD pair.
The market data is provided by the HitBTC exchange. The charts for the analysis are provided by TradingView.