Price Analysis 31/07: BTC, ETH, XRP, LTC, BCH, BNB, EOS, BSV, XLM, ADA
Will volatility in cryptocurrencies pick up after the Fed’s announcement today? What are the critical levels to watch out for?
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Market data is provided by the HitBTC exchange.
The United States Federal Reserve cut rates today for the first time since 2008, which some believe is unwarranted as the economy is on strong footing. The rate slash is seen by some as a means to appease President Donald Trump, who has been critical of the Fed’s monetary policy.
The rate cut could attract investors to Bitcoin, which is not influenced by any political or central bank intervention. With its halving due in 2020, markets will also focus on the deflationary nature of Bitcoin.
On Tuesday, U.S. Senate Banking Committee Chairman Michael Crapo said that even if the country wanted to ban cryptocurrency, it was unlikely to succeed. Circle CEO Jeremy Allaire said that the U.S. will need to create appropriate regulation to protect investor interests and “to allow the technology and industry to flourish.”
It will be interesting to note how Bitcoin and altcoins react to the Fed rate cut. Let’s identify the actionable levels on the major cryptocurrencies.
The failure by bears to sink Bitcoin (BTC) below $9,080 is attracting buyers. The bulls will now try to propel the price above both moving averages and resume the uptrend. If successful, the cryptocurrency will move up to the downtrend line, which might act as a resistance. However, if this line is scaled, the next target is a retest of the recent highs at $13,973.5. As the signs are positive, we suggest traders initiate long positions as recommended in an earlier analysis.
The 20-day EMA has started to flatten out, which suggests that bears are losing their grip. The 50-day SMA is still sloping up, which shows that the medium-term trend is up. Our bullish view will be negated if the BTC/USD pair turns down from the moving averages and plummets below $9,080. Such a move will indicate selling at higher levels. Below $9,080, the next support is at $7,451.63.
After holding the uptrend line for the past few days, Ether (ETH) has started a recovery. The bulls will now try to push the price above the 20-day EMA. If successful, a rally to the 50-day SMA is probable. There is minor resistance at $235.70, above which the digital currency is likely to gain strength. Hence, traders can buy as suggested in our earlier analysis.
Contrary to our expectation, if the ETH/USD pair fails to rise above the overhead resistance and turns down, it will indicate selling at higher levels. The next dip might break below the uptrend line because it will force the aggressive bulls to liquidate their long positions. With both moving averages sloping down and the RSI in the negative zone, bears still have the upper hand. We might get a clear directional move within the next few days.
XRP has moved up to the 20-day EMA, which is the first resistance. If this is crossed, the pullback can reach $0.34229, above which we anticipate the cryptocurrency to show strength. The traders can wait for the price to close (UTC time frame) above $0.34229 before initiating long positions. The stop loss for the trade can be kept at $0.275 and the first target is a move to the 50-day SMA and above it $0.45. As the cryptocurrency is stuck in a range, allocate only 50% of the usual position size for this trade.
However, if the bulls fail to propel the XRP/USD pair above the overhead resistance, it might again slide back to $0.30, below which a retest of $0.27795 is possible. A break of $0.27795 will be a huge negative as it will trigger several stop losses and can result in a quick decline to $0.19.
The bulls are attempting to push Litecoin (LTC) above the uptrend line. If successful, it will signal a probable change in trend. There is a minor resistance at $105.676 from where the pullback returned on July 20. After this is scaled, the cryptocurrency can move up to the 50-day SMA and above it to $140.345.
Contrary to our assumption, if the LTC/USD pair fails to break out and sustain above the downtrend line, it can again dip to $83.65. A break below $76.7143 will extend the down-move. On the other hand, if the price breaks out of the downtrend l