Bitcoin, Ethereum, Ripple, Bitcoin Cash, EOS, Litecoin, Binance Coin, Stellar, Cardano, TRON: Price Analysis May 20
Investors are returning to cryptocurrencies following the recent rally that briefly took bitcoin above $8,000.
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Market data is provided by the HitBTC exchange.
Bitcoin rallied about 101.55% between April 2 and May 14. This sharp rally after a long bear phase surprised many, including us. Analysts at JPMorgan Chase have said that, after the rally, Bitcoin is trading above its intrinsic value. They find some similarities in the current rally to the one in late 2017.
However, we believe that a rally of such a magnitude was necessary to change the sentiment from sell on rallies to buy on dips. Fundstrat Global Advisors co-founder Tom Lee tweeted that the bear market is over. In a recent conference, he cited 13 reasons that indicate the end of the bear phase.
The recent upsurge in prices has attracted investors back into cryptocurrencies. The trading volumes at the centralized exchanges skyrocketed in April. Notwithstanding, we do not expect a vertical rally from current levels. It is likely to be a gradual up-move. We may witness one more round of selling that will shake out the weaker hands before starting a sustained uptrend.
Bitcoin (BTC) held the 20-day EMA and rebounded sharply on May 19. However, the bears are mounting a strong defense at the overhead resistance of $8,496.53. If the bulls fail to scale this level, the digital currency might remain range bound between the 20-day EMA and $8,496.53.
A breakdown of the 20-day EMA can drag the price down to the next critical support of $5,900. We expect this level to hold.
On the contrary, if the bulls scale above $8,496.53, the BTC/USD pair can rally to the next target of $10,000. The trend is bullish as both the moving averages are sloping up and the RSI is close to the overbought zone. However, we do not find any reliable buy setups yet, hence, we are not suggesting a trade in it.
The drop in Ethereum (ETH) took support at $225.39. This is a positive sign. Both the moving averages are sloping up and the RSI is in positive territory. This suggests that the bulls have the upper hand. The digital currency will now try to move up to the $300–$322 resistance zone.
On the other hand, if the ETH/USD pair plummets below $225.39, it will lose momentum. The trend will weaken if the 20-day EMA breaks down. Therefore, if the traders hold some long positions, they can raise the stop loss to $210. They can keep trailing the stops just below the 20-day EMA. Others, who have already closed the long positions can wait for a new buy setup to form before entering again.
Ripple (XRP) triggered our buy levels recommended in the previous analysis. Though the digital currency bounced on May 19, the bulls could not sustain the higher levels. It has again dipped towards the 20-day EMA, which is an important support to watch out for.
If the bears sink the XRP/USD pair below the moving averages, a drop to $0.27795 is probable. Therefore, traders can keep the stop loss on the long positions at $0.2750.
Conversely, if the pair bounces off the 20-day EMA and scales above $0.45, it is likely to pick up momentum and move up to $0.60. Though there are minor resistances at $0.50 and $0.55, we expect them to be crossed.
Bitcoin Cash (BCH) rebounded from the 20-day EMA, which is a positive sign. The trend remains bullish as both the moving averages are sloping up and the RSI is above 50. On the upside it is facing selling at the resistance line of the channel. If the bulls fail to break out of the channel, the digital currency might still move up gradually as long as it stays above the 20-day EMA.
The first sign of weakness will be a break below the 20-day EMA. After that, a drop to the support line of the channel is probable. A breakdown of the channel will change the trend in favor of the bears. On the other hand, if the BCH/USD pair breaks out of the channel, it can pick up momentum and rally to $600.
Litecoin (LTC) bounced from the first support and scaled above $91 on May 19, but it is struggling to stay above this level. It is again back below $91 and might retest the support at $84.3439. The 20-day EMA is also just above this support. Hence, this is an important level to watch out for.
If the LTC/USD pair slides below $84.3439, it can fall to $74.6054. If this support also gives way, the pair can drop to $66.47.
On the other hand, if the bulls propel the digital currency above $91 and sust