The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
With the news from South Korea confirming government’s positive stance on cryptocurrencies trading, the market still remains volatile.
If it doesn’t recover within the next few days, negative news might prompt the bulls selling, that will lead to long liquidation.
However, if the bulls succeed in defending the critical support levels, we might see a sharp pullback and the money sitting on the sidelines will rush into the markets, providing a further boost to the upside.
We believe that we should see a strong move up or down within the next 3-5 days. Let’s see how we can capitalize on this.
Bitcoin price went down yesterday, January 30, resulting in a sharp decline. Currently, it is finding support just below the critical level of $9,920.02.
If the bears build on their advantage and break below the $9,300 levels, we should see a slump to $8,000. If the BTC/USD pair makes a new low, we shall not buy.
However, if the bulls regroup themselves and buy aggressively, pushing prices above the downtrend line, it will signal a likely reversal. That’s why we suggest buying on a close above $12,200 with an initial stop loss of $9,600. We expect the bounce to face strong resistance at $14,000 levels.
Though this trade doesn’t offer a good risk to reward ratio, we suggest taking it because the goal to buy as close to the bottom as possible. We should close the position quickly if it doesn’t gain momentum above $12,200.
As the chances of a whipsaw are high, please keep the allocation size at 50 percent of normal.
Ethereum continues to be strong as it is still trading above the uptrend line and above both moving averages. We are holding 50 percent of our original purchase done at $1,000 levels with the stops at breakeven.
But the up move is facing profit booking at higher levels. As a result, the 20-day EMA has turned flat, which points to a consolidation in the short-term. The 50-day SMA continues to rise indicating the uptrend continuation.
Our bullish view will be invalidated if the cryptocurrency plunges below the uptrend line and the 50-day SMA.
If this level holds, the bulls will attempt to break out of the 20-day EMA and the downtrend line. In case they succeed, we can expect the cryptocurrency to remain range-bound between $1,364.9657 and $2,072.6853.
Ripple continues to be under pressure. It is unable to settle at any support level. Currently, it is taking support at the psychological level of $1.
Until then, we don’t find any buy setups on the XRP/USD pair, so we don’t recommend any trade on it.
Stellar has broken down of the trendline immediate support and the price is quoting below the 20-day EMA.
On the upside, the XLM/USD pair is likely to face resistance at the trendline and the recent swing high at $0.634 levels.
Initiating long positions only above $0.65 levels might be a good move in this case.
Litecoin broke below the critical support of $175, which completes the bearish descending triangle pattern. The bears are likely to push the price down to $140.001 and after that to $85 levels.
NEM has turned down after failing to break out of the moving averages. It is currently trying to hold the support at the downtrend line 1. If this support breaks, we might see a fall to the $0.60.
It seems reasonable to wait for a reliable buy setup to form before initiating any long positions on it.
NEO has been in a strong uptrend since December 2017. During the recent correction, it has not given up much ground, which makes it a relative outperformer. It is quoting above both the 20-day EMA and the 50-day SMA, which is a bullish sign.
This way long positions can be initiated at $170 and the stop loss can be kept at $130.
Our bullish view will be invalidated if the cryptocurrency breaks down of the triangle, which can push it down towards the support zone of $85 to $100.
EOS is in an uptrend from November 2017. The price has bounced off the trendline on four occasions. Currently, the price has again declined to the trendline.
However, any pullback from the trendline will face resistance at the $14 levels. We expect a few more days of consolidation before a breakout. Long positions might be initiated if the EOS/USD pair holds the trendline for the next couple of days.
In case the cryptocurrency breaks below the trendline, our bullish view will be invalidated.