Bitcoin, Ethereum, Ripple, Bitcoin Cash, EOS, Litecoin, Cardano, Stellar, IOTA, NEO: Price Analysis, July 06
Fundstrat’s Tom Lee has doubled down on his $25,000 target for Bitcoin by end of 2018. Is that really possible from the technical analysis point of view?
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.
The market data is provided by the HitBTC exchange.
Fundstrat Global Advisors co-founder Tom Lee continues to be bullish on Bitcoin. He expects Bitcoin to trade roughly at 2.5 times the mining cost, which according to him will increase from the current levels of $7,000 to $9,000 by the year end. Lee has a target of $20,000 and higher for Bitcoin by the end of 2018.
We don’t concur with his target levels from the technical analysis point of view. $10,000 and $12,000 are likely to be two price points that will be difficult to cross for the bulls.
However, if cryptocurrencies witness a flood of institutional investing, then those resistance levels will be easily crossed. While the retail investors are largely staying away in fear of a further fall, the professional traders are using the current downtrend as an opportunity to enter crypto trading.
Amsterdam-based speed trader Flow Traders NV, one of the largest securities traders in Europe, has entered the cryptocurrency market, as reported July 5. The arrival of such giants is a clear indication that the larger players are taking the plunge and these lower levels are unlikely to remain for long.
So, what can the traders buy now? Let’s find out.
Though Bitcoin is sustaining above the 20-day EMA, it is finding difficult to break out of the overhead resistance at $6,953.38. Once this level is crossed, there is no resistance until $7,750.
We also find that the BTC/USD pair is forming an inverted head and shoulders (H&S) pattern that will complete on a breakout and close above $6,953.38. This pattern has a target of $7,996.11, which is close to the resistance from the downtrend line.
The 20-day EMA has turned flat, which shows that the bears are losing momentum. We might see a small dip, which will form the right shoulder of the inverted H&S pattern. Once we get this dip, it will help us trail the stops higher and we will also have a new stop loss position for any fresh purchases.
Our bullish view will be invalidated if the bears sink the cryptocurrency below $5,900. Therefore, please retain the stop losses at the recommended levels for the long positions initiated at $6,650.
Ethereum has been trading in a tight range for the past three days. The bulls have kept it above $450 while the bears have capped the upside at the 20-day EMA.
If the bulls break out of the intraday highs of July 3, a move to $550 and thereafter