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Market data is provided by the HitBTC exchange.
It is the last day of a very tough year for crypto traders. While 2018 started on an upbeat note, it is ending with uncertainty. Traders and analysts are divided on whether cryptocurrencies have bottomed out. This, in a way, is good, because markets are cautious and excesses have been removed.
There are a number of events in 2019 that could turn crypto markets around. All eyes will be on institutional investors because their involvement is needed to propel markets to the next level. Even in the wake of a crushing bear market, crypto traders are looking to invest in virtual currencies. 40 percent of participants in a recent Chinese survey showed interest in investing in cryptocurrencies in the future. Similar surveys in the United States, Germany and the United Kingdom have all projected favorable demand for cryptocurrencies.
We are bullish on digital currencies for 2019, however, we believe that it will be a gradual move higher and expectations should be muted. Trade safe so that we are around to reap the benefits when the next vertical run happens. Are there any tradeable setups at current levels? Let’s find out.
BTC/USD
Bitcoin is struggling to breakout of the 20-day EMA that has turned flat. Failure to break out will attract selling that will pick up momentum below $3,598.99. The downtrend will resume on a breakdown of the Dec. 15 low. The falling 50-day SMA confirms that the long-term trend is still down.
The BTC/USD pair will show signs of a probable reversal if it breaks out of the neckline of the developing inverse head and shoulders pattern. The 50-day SMA and the horizontal resistance at $4,255 are all located close by. This makes it a critical level to watch on the upside.
The breakout of the neckline has a pattern target of $5,500. Though there is a minor resistance at $4,914.11, we expect it to be crossed. Short-term traders can wait for a close above $4,255 to buy. The stops can be kept just below $3,550.
XRP/USD
Ripple is facing a stiff resistance at the 50-day SMA. If the bulls fail to scale above this resistance quickly, a drop to $0.33108 is probable.
The XRP/USD pair will weaken below $0.33108 and can plunge to the next support at $0.286. If this support also breaks, a retest of $0.24508 will be in the cards.
Both the moving averages are flattening out, which points to a likely consolidation in the near-term. The digital currency will turn positive in the short-term if the price sustains above $0.40. Such a move can result in a rally to the resistance line of the descending channel at about $0.48.
We can expect a new uptrend if the bulls breakout and close (UTC time frame) above the channel. In such a case, the rally can extend to $0.56, $0.62 and $0.7644.
ETH/USD
The pullback in Ethereum stalled at $153 on Dec. 29 while managing to stay above $136 for the past two days.
Both the moving averages are on the verge of a bullish crossover, which suggests that the short-term trend is changing. We expect the bulls to again attempt to break out of $167.32.
Contrary to our expectation, if the ETH/USD pair turns down from the current levels and drops below $116.3, it can fall to $100 and below that to $83. We suggest traders wait for a new buy setup to form before buying it.
BCH/USD
Bitcoin Cash is trading inside a descending channel. Currently, the bulls are attempting to keep the price above the 20-day EMA.
A quick breakout of the channel will turn it into a bullish flag, which has a pattern target of $355, with a minor resistance at $307.1. Short-term traders can benefit from this move by being on the long side of the markets.
However, if the bears fail to breakout of the channel and the 50-day SMA, the BCH/USD pair can again turn down to the bottom of the channel. A break below the channel can lead to a drop to the low at $73.50.
EOS/USD
The bulls have not been able to carry EOS much above the 20-day EMA. This shows a lack of buyers at higher levels. The 20-day EMA is more or less flat and the RSI is close to 50. This increases the probability of a consolidation in the near-term.
A break of the $2.3093–$2.1733 support zone will sink the EOS/USD pair to the low of $1.55. A break of the lows will resume the downtrend. On the upside, a breakout and close above the 50-day SMA will be a positive development that can result in a rally to $3.8723. Currently, we do not see any reliable buy setups, hence, we are not suggesting a trade in it.
XLM/USD
The bulls are struggling to push Stellar above the 20-day EMA. The 50-day SMA is turning down, which confirms the long-term downtrend. In the short-term, the RSI has fallen back below 50 and the 20-day SMA is flat, which suggests a probable consolidation. However, if the price slides below $0.11024826, it can retest the lows.
On the upside, a break above the 20-day EMA will again face resistance at $0.13427050. The XLM/USD pair will show signs of a possible reversal on a breakout and close above $0.13427050. However, it has been an underperformer, hence, we shall wait for a new uptrend to start before suggesting a trade in it.
LTC/USD
The recovery in Litecoin is facing a stiff resistance at the 50-day SMA. The bulls have not been able to sustain above it since Nov. 6, so a breakout and close above the 50-day SMA will signal strength.
The bullish inverse head and shoulders pattern will complete on a breakout of $36.428. The pattern target of a breakout of the neckline is $49.756. Therefore, traders can initiate long positions on a close (UTC time frame) above $36.428. As the long-term trend is still down, traders can maintain a position size of only about 40 percent of usual.
If the LTC/USD pair turns down from current levels, it can slip back to $28.067 and if this support breaks, a retest of the lows is probable. The downtrend will resume on a break below $23.10.
BSV/USD
The bulls attempted to rebound from close to the bottom of the range on Dec. 28 but the pullback fizzled near $100.
Currently, the bears are attempting to break down of the range. If successful, the BSV/USD pair can dip to $65.031 and if this support also breaks, the fall can extend to $38.528.
However, if the bulls defend the bottom of the range, the digital currency might remain range bound for a few more days. We shall turn positive above $123.98 or on a strong rebound from $80.352. Until then, we suggest traders remain on the sidelines.
TRX/USD
TRON is finding support at $0.0183 and is facing resistance at $0.022. A breakout of $0.022 can result in a rally to $0.0246 and above it to $0.02815521.
We have been positive on the TRX/USD pair for the past few days because it has bounced sharply from the lows and has sustained the higher levels. The bullish crossover of the moving averages also suggests that the bulls are in command.
Our positive view will be invalidated if the support at $0.0183 breaks. Therefore, traders who went long closer to $0.02, on our recommendation, should keep a stop just below $0.018. Below $0.0183, the digital currency can slide to $0.016 and $0.014.
ADA/USD
Cardano has stayed above the 20-day EMA for the past three days. The 20-day EMA is gradually turning up and the RSI is in positive territory, which shows a marginal advantage to the bulls.
The bulls are currently trying to break out of the neckline of the inverse head and shoulders pattern. If successful, the cryptocurrency can rally to the pattern target of $0.066. There is a minor resistance at $0.060105, but we expect this level to be crossed.
Conversely, if the ADA/USD pair turns down from current levels and breaks below $0.036815, it can retest the lows. We expect a decisive move within the next 3–4 days.
Market data is provided by the HitBTC exchange. Charts for analysis are provided by TradingView.
