Price Analysis 08/07: BTC, ETH, XRP, LTC, BCH, EOS, BNB, BSV, TRX, ADA
Bitcoin’s rally continues to attract traditional investors. Will their entry propel the price to new highs? Let’s study the charts.
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Market data is provided by the HitBTC exchange.
The bitcoin price surged more than $435 in a matter of 10 minutes early Monday morning (UTC time), likely due to short sellers covering their positions. The resilience of the leading digital currency and the sharp recovery in prices has forced Mark Mobius, founder of Mobius Capital Partners LLP, to change his earlier negative view on bitcoin. Though he does not own bitcoin, he said that if it continued to grow, he might have to add it to his portfolio.
Deutsche Bank has announced that it will shut down its equities sales and trading business and also cut back its fixed income business. This will lead to 18,000 job cuts. Analysts have pointed out that one of the reasons for this move is the ultra-loose monetary policy adopted by the central banks. However, money printing will benefit cryptocurrencies and bitcoin in particular as it has a fixed supply that cannot be altered. What do major cryptocurrency charts project? Let’s analyze the charts and find out.
Bitcoin (BTC) has rebounded off the 20-day EMA and the bulls are currently attempting to scale above the $12,000–$12,500 resistance zone. A breakout of this zone can retest the recent highs of $13,973.50. We anticipate stiff resistance at this level but if the momentum can break through it, short sellers will be forced to throw in the towel, which can propel the price to $16,249.42. Above this, a retest of the lifetime highs will be in the cards.
Both moving averages are sloping up and the RSI is in positive territory. This suggests that the bulls still hold the advantage in the short term.
However, if bears defend the overhead resistance zone, the BTC/USD pair might again dip back to 20-day EMA. A break of this support can drag the price to the 50-day SMA. We anticipate this support to hold and it can act as a good entry point for the traders.
We suggest traders wait for the price to rebound off the supports before buying, because if 50-day SMA fails to hold, traders will be forced to liquidate their long positions. Nonetheless, with the bear market having ended, traders should view dips as a buying opportunity.
Ether (ETH) has bounced back above the 20-day EMA, which is a positive sign. We like the way bulls have managed to keep the price above the 50-day SMA during this pullback. It shows that buyers are not waiting for a deeper correction to enter long positions.
The bulls might face resistance at $320.840 and above it at $366. However, if the price breaks out and closes (UTC time frame) above $320.840, we suggest traders buy 40% of the desired position size. A stop loss for the trade can be kept at $270. Remaining positions can be added on a breakout above $366.
We are recommending long positions on a breakout above $320.840 because the ETH/USD pair will complete a rounding bottom pattern that has a target objective of $557.43. There is stiff resistance close to $500, hence, we will keep it as our initial target. Our bullish view will be invalidated if the pair reverses direction from the overhead resistance and slumps below $270.