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Bitcoin has once again proved to be the dominant cryptocurrency. What does it mean for altcoins?
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* BTC/USD, ETH/USD and LTC/USD market data is provided by the HitBTC exchange.
The top two currencies by market capitalization are nearing critical updates and the market is clearly favoring one over the other. Over the weekend, traders sold the altcoins and piled on Bitcoin. As a result, Bitcoin’s dominance has again crossed over the halfway mark. Will this trend continue or will the altcoins play catch up? Let’s find out.
Our readers continue to benefit from the rally in Bitcoin. The upmove over the weekend has carried the cryptocurrency towards our target objective. So, should we sell out or wait?
The digital currency has reached $4680 levels, which is a major resistance. We expect a small pullback or a consolidation at these levels. Therefore, we recommend selling around 50% of the existing positions at the current levels and holding the rest with a stop loss of $4250.
We don’t want to book out of our complete position because the uptrend in Bitcoin is still strong. A breakout above $4680 will push the virtual currency towards its all time highs.
Therefore, we want to hold about 30 to 35% of our original position, expecting to book out around $5000.
On the downside, Bitcoin has support from the trendline at $4400 levels. If this support breaks, the next major support zone is between $4150 and $4250 from both the moving averages. The outlook will become negative if it starts to trade below $4100 levels.
Our long positions on Ethereum were initiated yesterday at $317. However, the position quickly turned into a loss as the cryptocurrency failed to sustain this level.
The bulls were unable to capitalize on the breakout of the range. As a result, the eager bulls, like us, are stuck with the long position. Both the moving averages are flat, suggesting continuation of the range bound action.
Chances are that the cryptocurrency will now fall towards the lows of the range. Nevertheless, we shall continue to hold our position with a stop loss of $278. A breakdown and close below the range can sink Ethereum to $257 levels.
The digital currency will become positive only on a breakout and close above $317.
Bitcoin Cash has resumed its downtrend.
Bitcoin and Bitcoin Cash are moving in opposite directions. Bitcoin Cash has a major support at $300. We expect a small pullback or a consolidation close to this level. However, as the cryptocurrency is in a strong bear grip, we don’t recommend buying it.
We shall consider buying the cryptocurrency only after it rallies and sustains above $385 levels. Until then, we shall stick to trading the other cryptocurrencies that have a bullish chart pattern.
Our long positions continue to gain as Ripple rallies towards our second target objective of $0.30000. We had booked 30% profits in our long positions on Friday. What should we do with the remaining 70% position now?
With the breakout above the downtrend line, the cryptocurrency has invalidated the bearish descending triangle pattern, which is a bullish sign. A rally to $0.30000 is likely. Above $0.30000, the digital currency can rally to $032500 and $0.34000. Once these two levels are crossed, a move to $0.40000 is likely.
However, considering the overhead resistances, we recommend booking profits on 50% of the existing long positions and holding the rest with a stop loss of $0.23500. We shall keep trailing this stop loss higher as the cryptocurrency moves up.
On the downside, we expect a strong support at $0.25000 levels. A breakdown and close below this level will be negative for the cryptocurrency.
Lackluster trading in Litecoin continues. The cryptocurrency is not showing any buying interest.
Over the weekend, Litecoin could not even cross the 20-day exponential moving average, which is a bearish sign. If the cryptocurrency breaks below $50, a fall to $44 is likely.
As the digital currency has previously taken support at $44, we expect buyers to step in again this time. However, we shall wait for a confirmation before jumping in to buy at the lower end of the range. We are not recommending any trade on Litecoin until we get a breakout above $58.
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