Price Analysis 07/08: BTC, ETH, XRP, BCH, LTC, BNB, EOS, BSV, XMR, XLM
Bitcoin is struggling to move up. What are the critical levels to watch out for? Let’s analyze the charts.
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Market data is provided by the HitBTC exchange.
The rally in cryptocurrencies has largely been led by Bitcoin (BTC). Its dominance has increased from 51.63% at the start of the year to close to 70% in just over seven months. This shows that the crypto recovery has been a Bitcoin story throughout. Therefore, many traders who had held altcoins in their portfolio are not seeing the same kind of returns as those who majorly own Bitcoin.
Former Wall Street trader Max Keiser believes that Bitcoin’s dominance will hit 80% and altcoins will die. However, we believe that the crypto story is unlikely to remain only about Bitcoin. As it is the leader, initially, institutional players will prefer to buy it. However, as the market matures, many projects with strong use cases will make a strong comeback. Though Bitcoin might continue to be the leader, there will be many altcoins that will generate huge returns for investors.
Bitcoin’s hallmark as digital gold has been validated by physical gold in the past three months. The correlation between the two has risen from 0.496 in the past year to 0.837 in the past three months. This shows that Bitcoin is being seen as a safe haven investment and is also being used for hedging purposes.
Bitcoin (BTC) rallied above the downtrend line on Aug. 6, but failed to sustain the higher levels. The bears attempted to sink it back below the downtrend line, but bulls held the support. However, the price is again struggling to sustain above $12,000, which shows selling at higher levels.
If the BTC/USD pair breaks below the downtrend line, it will indicate that the breakout on Aug. 5 was a bull trap. A breakdown of both moving averages will further weaken the uptrend. Therefore, traders who had initiated long positions on our recommendation can trail the stop loss to $10,500. Let’s reduce the risk.
Conversely, if the price holds above the downtrend line, it will indicate demand on dips. The moving averages are on the verge of a bullish crossover and the RSI is in the positive zone, which shows that bulls have the upper hand in the short term. The first target on the upside is $13,156.96, above which a retest of the recent highs of $13,973.5 is probable. A breakout of this level is likely to generate FOMO, resulting in a quick surge to $17,208.84.
Though Ether (ETH) failed to sustain above $235.70 for the past two days, bulls have managed to keep it above the 20-day EMA, which is a positive sign. As the digital currency is still trading above its uptrend line, we remain bullish on it.
If bulls push the price above $235.70, it is likely to resume its uptrend. The 50-day SMA might offer resistance, but we expect it to be crossed. Therefore, we retain the buy recommendation given in an earlier analysis.
However, if the ETH/USD pair breaks below the 20-day EMA, it will retest the uptrend line. A breakdown of this line will be the first signal that the uptrend is in danger. The pair will start a downtrend on a break below $192.945.
Though XRP rose above the 20-day EMA on Aug. 5, it could not close (UTC time frame) above it. This shows selling at higher levels. The bears will now try to sink the price below the immediate support of $0.30. If that happens, a retest of $0.27795 is probable.
The XRP/USD pair has not broken below $0.27795 since mid-December last year. Hence, we anticipate a strong defence of this level by bulls. On the upside, we expect the pair to show strength if it sustains above $0.34229. Therefore, we retain the buy recommendation given in the previous analysis.
However, if $0.27795 support cracks, the digital currency will start a new downtrend that can extend the fall to $0.19. The downsloping moving averages and RSI in the negative territory show that bears still have the upper hand.