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Bitcoin’s dominance is down to 44.7 percent because, while the leader has been consolidating near the highs, altcoins have been playing catch up. However, let’s study the charts and see whether this trend is likely to continue or if is Bitcoin ready to surge once again.
As expected, Bitcoin has been facing resistance at the lifetime highs. However, it has not given up its gains, which shows its underlying strength.
There is a small resistance at $4630. Notwithstanding, the cryptocurrency is likely to breakout of it and rally to about $5000 levels, where it should face stiff resistance as it’s a major psychological barrier. Therefore, the stop loss should be trailed higher to lock in any gains.
A note of caution. The RSI is showing the first signs of a negative divergence, which is a bearish development if confirmed by a fall in price. Therefore, traders should keep their allocation size small. A fall and close below the channel support and the 20-day exponential moving average (EMA) will invalidate our bullish view.
Ethereum continues to rally towards our first target of $381, where it is likely to face dual resistance from the horizontal line and the rising wedge. Therefore, it might be a good idea to take partial profits close to $375 levels and hold the rest with a close stop loss.
Though we expect the rally to stall for a short while at the overhead resistance, the trend will remain up as long as Ethereum remains above the trendline.
However, if the bulls manage to push through the resistance, a retest of the lifetime highs is possible. Hence, traders should continue to hold their positions with appropriate stop losses. Nevertheless, we don’t advise fresh positions above $381, as the risk/reward ratio is not favorable.
Bitcoin Cash is slowly drifting down towards a support level of $550. No long trades should be initiated as long as the digital currency is below the downtrend line. Though aggressive traders can buy the breakout and close above the downtrend line, please keep the allocation size small because it is likely to face resistance at $736.
If the price breaks and closes below the critical support of $550, Bitcoin cash can fall to $440 levels. Therefore, no long positions should be taken at lower levels until a new buy setup forms.
Though ripple broke above our buy levels of $0.24000, it never closed above it, which shows selling at higher levels. The downtrend line is acting as a stiff resistance.
If traders have any long positions, they should be squared off below $0.19200 levels, because the digital currency will become negative below this level. Any fresh positions should now be initiated only on a close above the downtrend line. Please keep the allocation size small because this cryptocurrency is volatile.
Litecoin almost touched our target objective of $65. Traders might want to take partial profits at these levels and hold the rest with a close stop loss of $58, because the cryptocurrency can rally to the upper end of the channel, which is around $70.
However, Litecoin has a history of correcting after two or three large range bullish closes, therefore traders should be cautious at these levels. Traders who have closed their long positions at about $65 levels had better wait for a new buy setup to form.
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