Price Analysis 26/06: BTC, ETH, XRP, BCH, LTC, EOS, BNB, BSV, ADA, TRX
How far can the parabolic rise of bitcoin continue? What are the next levels to watch out for?
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Market data is provided by the HitBTC exchange.
Bitcoin (BTC) has continued with its stellar run as no resistance level is being able to hold it back. It easily covered a distance from $10,000 to $13,000 within five days. This shows massive buying that has seen its market dominance reach 62.1% for the first time since April 2017. The recovery in the crypto markets is being led by the leader, which is positive for the asset class.
With this recovery, bitcoin once again rises from the dumps as the doubters continued to write its obituary. Its low correlation with other traditional asset classes makes it an interesting bet for the institutional players wanting to diversify their portfolio due to the ongoing geopolitical tension and trade issues. Deutsche Bank exec Jim Reid said that aggressive rate cuts by central banks was also a contributing factor in the recent surge in bitcoin prices.
Data from institutional crypto lender Genesis Capital shows a significant increase in institutional activity in the past 12 months. While the rise is parabolic and is not sustainable, an important factor is that the rally had been climbing a wall of worry until it broke out of $10,000. Since then, analysts have again started to project sky-high targets for bitcoin. When that happens and it becomes easy to make money, a short-term top is likely.
Contrary to our assumption, bitcoin easily cleared the $12,000 and $13,000 overhead resistance levels on the same day. Such strong buying near critical resistance levels suggests huge demand. When the momentum is so strong, it is difficult to point a particular level where the rally will stall. Still, traders can keep a few targets in mind.
With the breakout and close (UTC time frame) above $13,000, the next level to watch is the Fibonacci extension level of $14,273.84 and above it $15,433.33. If both these levels are scaled, the next target is $17,310.14.
However, the RSI has reached close to 89, which indicates that the rally is hugely overbought in the short term. Even in the previous bull phase, the highest reading recorded was about 93 on the RSI. This shows that the markets are vulnerable to a sharp pullback.
In this leg of the rise, the BTC/USD pair has soared vertically without even attempting to form a base at any level. Therefore, on the way down, the nearest logical support is way lower at the 20-day EMA. After such a sharp up move, we anticipate the volatility to remain high for the next few days. At the risk of being left out, we believe that the pair does not offer any buying opportunities at the current levels as the risk to reward ratio is heavily skewed to the downside.
Ether (ETH) has broken out of the overhead resistance at $320.840. If the bulls close (UTC time frame) the price above this level, it will complete a rounding bottom pattern, which is a reversal formation and has a target objective of $557.43.
Both the moving averages are trending up and the RSI is in the overbought zone, which suggests that the bulls are in command. We will wait for a retest of the breakout level before recommending a long position in it. The ETH/USD pair will indicate weakness if the price reverses direction and plummets below $320.840.
Ripple (XRP) held the pullback to the breakout level of the symmetrical triangle on June 24. This is a positive sign. Both the moving averages are sloping up and the RSI is in positive territory, which shows that the bulls are in command. They will now try to push the price above the overhead resistance of $0.50500. If successful, it can move up to $0.57259 and above it to $0.6250.
Contrary to our expectation, if the XRP/USD pair fails to gain ground, it can dip back to the breakout level of the triangle once again. The 20-day EMA is just below this level, hence, we expect it to act as a strong support; b