Price analysis 12/16: BTC, ETH, XRP, LTC, BCH, LINK, ADA, DOT, BNB, XLM
Crypto traders and investors received an early Christmas gift today as Bitcoin (BTC) price cleared the $20,000 psychological milestone for the first time in history. Today’s breakout is equally significant as it serves to heal the scars of the traders who may have bought right at the top in 2017 and held their positions until now.
The current uptrend in Bitcoin has been all about institutional adoption. The latest institutional investor to have announced a position in Bitcoin is the United Kingdom-based investment manager Ruffer Investment Company Limited.
As has been the case with most institutional purchases this year, Ruffer said that they bought Bitcoin as an “insurance policy against the continuing devaluation of the world’s major currencies.”
Institutional participation has been so high that the Bank of America Merrill Lynch Global Fund Manager Survey shows that respondents believe that Bitcoin is the third most crowded trade behind technology stocks and short positions on the U.S. dollar.
Institutional investors have continued to flock to Bitcoin because it has outperformed most major asset classes by a wide margin. Hence, institutional investors who were early to the Bitcoin party are most likely sitting on huge profits and their portfolios are outperforming other fund managers who only own legacy markets. As Bitcoin continues to draw more attention from the investor class, inquisitive clients may force more institutions to allocate a portion of their money to BTC.
Now that Bitcoin has resumed its uptrend let’s analyze the charts of the top-10 cryptocurrencies to identify the target objectives on the upside.
BTC/USD
Bitcoin (BTC) has soared well above $20,000 with a strong breakout. This shows that several traders have jumped in after the break above the psychological round figure at $20,000.
Any asset that makes a new all-time high is in a strong uptrend. The BTC/USD pair has completed an ascending triangle pattern, which has a target objective of $22,808.98. If this level is also crossed, the pair may reach $25,000.
The relative strength index (RSI) has still not reached the overbought zone, which shows that the BTC/USD pair has room to rally to the upside before the markets get overheated in the short-term.
Usually, after every breakout, the price turns down and retests the break out level. If the bulls buy this dip, then the level acts as a new floor. In this case, if the bulls flip the $19,500 level to support, the uptrend will remain intact.
This bullish view will be invalidated if the price reverses direction and breaks below $17,500.
ETH/USD
Ether (ETH) has surged today and reached the $622.807 to $635.456 overhead resistance zone. If the bulls can push and sustain the price above the zone, it will complete an ascending triangle pattern which has a target objective of $763.614.
The upsloping moving averages and the RSI above 61 signal that the path of least resistance is to the upside.
Contrary to this assumption, if the price turns down from the current levels or fails to sustain above the resistance zone, then a drop to the 20-day exponential moving average ($572) is possible. A strong rebound off this support may keep the uptrend intact.
However, if the bears sink the price below the 20-day EMA, it will suggest that traders are booking profits at higher levels. Such a move could keep the ETH/USD pair range-bound for a few days.
XRP/USD
XRP had found strong buying support at the $0.435420 level on Nov. 26 and the bulls again purchased the dip to this critical level today, which has resulted in a strong rebound.
The flattening 20-day EMA ($0.530) and the RSI close to the midpoint suggest a balance between supply and demand. However, the bears are unlikely to give up easily. They will try to stall the current recovery at the downtrend line.
If the price turns down from the downtrend line, the XRP/USD pair could drop to the 50-day simple moving average ($0.42). This is the final support because if it breaks down, the next stop could be $0.326.
However, if the bulls can push and sustain the price above the downtrend line, the pair could rise to $0.60.
LTC/USD
Litecoin (LTC) is trading inside a large symmetrical triangle. The bulls defended the 20-day EMA ($80) on Dec. 14 and 15, which could have attracted buying and the price has surged to the resistance line of the triangle today.
The rising 20-day EMA and the RSI above 61 signal that bulls are in control. If the buyers can push the price above the triangle and the $93.9282 overhead resistance, the next leg of the uptrend to $100 and then to $140 could begin.
Contrary to this assumption, if the price turns down from the current levels, the LTC/USD pair may extend its stay inside the triangle for a few more days.
BCH/USD
The long tail on the Dec. 14 candlestick shows strong buying by the bulls at lower levels. That was followed by another strong day on Dec. 15 and the buyers propelled Bitcoin Cash (BCH) above the $280 resistance.
The long wick on the Dec. 15 candlestick shows that the bears are trying to defend the $300 resistance. Today’s price action shows buying by the bulls closer to $280 and selling by the bears near $300.
This tight range trading is unlikely to continue for long. The RSI has risen back into the positive territory and the 20-day EMA ($280) is attempting to rise, which suggests that bulls have the upper hand.
If the price sustains above $300, the BCH/USD pair could rise to $320 and then to $338. This positive view will be invalidated if the price turns down and breaks below the 50-day SMA ($273). Such a move could again pull the price down to $250.
LINK/USD
Chainlink (LINK) turned down from the overhead resistance at $13.28 on Dec. 13 but the bears could not sink the price to the uptrend line. This attracted buyers who are currently trying to push the price above the $13.28 resistance.
If the bulls succeed, the LINK/USD pair could move up to $15 and then to $17.7777. If this level is also crossed a retest of the all-time high at $20.1111 is possible.
However, the flat moving averages and the RSI just above the midpoint does not signal a clear advantage either to the bulls or the bears.
Therefore, if the price turns down from the current levels, the pair may consolidate in a range for a few days.
ADA/USD
Cardano (ADA) rose above the $0.155 resistance on Dec. 14 but the price turned down from the downtrend line on Dec. 15. However, the bears could now sink the price below the 20-day EMA ($0.149). This attracted aggressive buying by the bulls who have propelled the price above the downtrend line.
The gradually rising 20-day EMA and the RSI above 59 suggest that bulls are in control. The ADA/USD pair could now rally to $0.1750 and then to $0.1826315. If this level is also crossed, the next target is $0.20.
Contrary to this assumption, if the price turns down from the overhead resistance then the pair may enter a range-bound action for a few days.
DOT/USD
Polkadot (DOT) broke above the downtrend line on Dec. 15, which suggests that the bears have lost their grip. The altcoin could now rise to $5.5899 where it is likely to face stiff resistance from the bears.
If the price again turns down from the overhead resistance, the DOT/USD pair could drop to the 20-day EMA ($5). If the bulls buy the dip to the 20-day EMA, it will increase the possibility of a break above $5.5899. Such a move could start a new uptrend that may reach $6.0857 and then $6.8619.
Contrary to this assumption, if the price turns down from the current levels and drops to the moving averages, it will suggest a lack of demand at higher levels. In such a case, the price may waver near the moving averages.
BNB/USD
Binance Coin (BNB) has bounced off the moving averages and the bulls will now try to push the price to the $32 overhead resistance. This level is likely to act as a stiff resistance as the price had turned down from it on three previous occasions.
If the price again turns down from $32, the BNB/USD pair could fall to the moving averages and then to the critical support at $25.6652. The flat moving averages and the RSI just above the midpoint suggest a balance between supply and demand.
The next trending move could start if the bulls push the price above the $32 resistance or if the bears sink the price below the $25.6652 support. Until then, the price action may remain volatile and random.
XLM/USD
Stellar Lumens (XLM) had turned down from the $0.18 overhead resistance on Dec. 14 but the positive thing is that the bulls defended the drop to the 20-day EMA ($0.16). The bulls are currently attempting to resume the uptrend by pushing the altcoin above $0.18.
The 20-day EMA has started to slope up gradually and the RSI is trying to sustain in the positive territory, which suggests a minor advantage to the bulls. If the price closes above $0.18, the XLM/USD pair could move up to $0.205 and then to $0.231655.
However, if the bulls fail to sustain the price above $0.18, the bears will try to sink the price back to the 20-day EMA. If that happens, it could keep the pair inside the $0.14 to $0.18 range for a few more days.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Market data is provided by HitBTC exchange.
