Hi Crypto Network,
For the past few days, Facebook’s Libra project has hogged the limelight. The regulators and politicians around the world are voicing their concern on the project, with only a few in support. This has turned the sentiment decisively negative. As a result, the traders have changed their strategy from buy on dips to sell on rallies.
However, we expect the focus of the crypto community to soon shift from Libra to the institutional investors. The long-awaited Bitcoin futures platform Bakkt has finally begun testing from July 22. The launch of Bakkt is likely to attract institutional investors to Bitcoin futures trading. Another event that can bring some cheer to the crypto community is the lunch between crypto industry leaders and the legendary investor Warren Buffet. Many hope that the meeting can change Buffet’s negative view on cryptocurrencies.
While the correction in a few altcoins has been harsh, we like the way Bitcoin has held during this period. This shows that strong hands have accumulated it during the recent rise from the lows. We expect buying to resume as soon as the positive news flow starts. Let’s look if we spot any buy setups in the top five cryptocurrencies by market capitalization.
BTC/USD
The recovery in Bitcoin hit a wall at 20-day EMA, which shows lack of demand at higher levels. The 20-day EMA has started to turn down and the RSI has dipped below 50. This shows that bears have the upper hand. They will now attempt to sink the price below the uptrend line. If successful, a drop to $9,071 is likely.
Repeated breakdown of a support line weakens it; therefore, the bulls are unlikely to buy this dip aggressively. If $9,071 breaks down, the price can drop to $7,427. As the probability of a fall is high, traders should avoid buying at the current levels.
Our bearish view will be invalidated if the price rebounds off the uptrend line or $9,071. If that happens, the bulls will again try to propel the price above 20-day EMA. We anticipate buyers to return if the price sustains above $11,150. Above this level, a rally to $13,202.63, followed by a retest of the highs is likely. Traders should wait for buyers to assert their supremacy before entering fresh positions.
ETH/USD
The trend in Ether has turned down. It has made a series of lower highs and a lower low. This shows that every rally is being sold into. The downtrending moving averages and RSI in the negative zone confirm that bears are in command. The pullback from the recent lows of $190.11 was shallow and could not extend beyond $236.58. This shows a lack of buying at higher levels. The price has turned down and is likely to retest $190.11. A drop below this critical support will attract further selling that can drag the price to $146.
Buying in a downtrend can result in quick losses. Therefore, we suggest traders avoid buying until the trend changes from down to up. The first sign of a change in trend will be if the bulls push the price back above $270 and break the lower high and lower low formation.
XRP/USD
XRP is trading inside a large range of $0.28524 to $0.46669. The price has repeatedly bounced off the support since mid-December last year. This shows that buyers are active when the price dips to the support. However, the digital currency has a history of trading near the support for an extended duration, as seen during end-January to mid-May of this year. Therefore, we are not in a hurry to recommend a trade in it.
The bulls had purchased the recent dip to $0.28524 on July 16 but they were unable to carry the price above the 20-day EMA. The price has turned down and might retest the support at $0.28524 once again.
If the bears break below the critical support of $0.28524, it will start a new downtrend. The first support on the downside is the yearly low of $0.24653 but we do not expect it to hold. We anticipate the fall to extend to $0.18.
However, if the next dip to $0.28524 is purchased, the digital currency will remain range-bound. We might suggest long positions if the next rebound off the lows is strong and scales above the 20-day EMA. Until then, we remain neutral on it.
LTC/USD
The trend in Litecoin has turned down. Every relief rally is facing stiff resistance at the 20-day EMA. Both moving averages are sloping down and the RSI is in the negative zone, which suggests that bears have the upper hand. They will now try to sink the price back to $83-$76.63 support zone.
If this support zone breaks down, the downtrend will extend to $64.86. As the trend has turned bearish, buying is not advisable at the current levels.
Our bearish view will be invalidated if the digital currency rebounds off the support zone and climbs above the 20-day EMA. A breakout of the downtrend line will indicate a change in trend. We will wait for the price to sustain above the downtrend line before recommending any fresh positions in it.
BCH/USD
Bitcoin Cash is in a downtrend. It is currently trading inside a descending channel. The rebound from the support line of the channel on July 15 turned around from the 20-day EMA. Both moving averages are turning down and the RSI is in the negative zone, which suggests that bears are in command.
If the price slides below the recent low of $255.06, it can correct to $227.40. This is an important support. If the price breaks below $227.40 and the support line of the channel, the fall can extend to $166.98.
Our bearish view will be negated if the bulls propel the price above the channel. We will wait for the cryptocurrency to signal a turnaround before suggesting a trade in it.
If you’ve booked your session above, we look forward to speaking to you soon!
Hopefully, you have enjoyed today’s article. Thanks for reading!
Have a fantastic day!
Live from the Platinum Crypto Trading Floor.
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