History suggests that Bitcoin (BTC) halvings have led to massive bull runs. After the first halving in November 2012, the top-ranked cryptocurrency on CoinMarketCap surged 10,000% from late 2012 to 2014. The second halving that took place in July 2016 produced a rally of about 2,500% from mid-2016 to Dec. 2017. On May 11, Bitcoin completed its third halving and the expectations are for another huge up move.
Other than history, current fundamental factors are setting the stage for a huge rally in Bitcoin’s future. The world is currently in the midst of a financial crisis due to the coronavirus outbreak and this dwarfs the previous financial crisis that led to the birth of Bitcoin.
In response to the current crisis, governments and central banks have gone to new extremes with their stimulus measures. For the first time ever, the U.S. Federal Reserve plans to invest in exchange-traded funds and the Trump Administration has started pressurizing the Fed for negative rates.
Daily cryptocurrency market performance. Source: Coin360
For more than a decade, the central banks have only resorted to cutting rates and printing more money in response to every financial problem. As a result, the Fed’s balance sheet has ballooned to over $6.72 trillion and the U.S. government’s debt is over $25 trillion.
The fear of inflation and currency crisis is likely to drive some investors towards cryptocurrencies, according to Anthony "Pomp" Pompliano, the co-founder of Morgan Creek Digital.
Fundamentally, the stage is set for the next bull run in cryptocurrencies but timing it would be difficult. Therefore, long-term investors can gradually build their portfolios on sharp corrections.
BTC–USD daily chart. Source: Tradingview
On May 10 and 11, the bulls aggressively defended the uptrend line. This could have led to short covering by the aggressive bears. The breakout above the 20-day EMA ($8,662) further strengthened the case for a possible retest of $10,000 levels.
The 20-day exponential moving average has started to slope up once again and the relative strength index has bounced off from close to the midpoint. This suggests that the bulls are in command and the path of least resistance is to the upside.
Above $9,200, a move to $10,000 is possible. The bears are likely to mount a stiff resistance between $10,000 and the downtrend line of the symmetrical triangle at $10,700. This zone is likely to be the real test of this up move.
The bullish view will be invalidated if the BTC/USD pair turns down and plummets below the uptrend line and the recent lows of $8,130.58. If that happens, a deeper correction to $6,471.71 is possible.
The sharp fall in Ether (ETH) on May 10 broke below the support line of the channel, which triggered the suggested stop-loss on the long positions at $185. However, buying near the lows helped the biggest altcoin recover and close (UTC time) inside the channel.
ETH–USD daily chart. Source: Tradingview
On May 11, the bears again attempted to break the uptrend by dragging the 2nd-ranked cryptocurrency on CoinMarketCap below the support line of the channel. However, the bulls again bought the dip.
This could have led to short covering by the aggressive bears and follow up buying by the aggressive bulls. This has propped the ETH/USD pair above the 20-day EMA ($196). The downtrend line might offer stiff resistance but if this level is scaled, the up move can retest $227.097.
Conversely, if the pair turns down from the downtrend line, the bears are likely to make another attempt to sink the price below the channel and the recent low of $176.112. If successful, a deeper correction is likely.
XRP plunged to a low of $0.17898 on May 10. This sharp decline triggered our proposed stop-loss on the long positions at $0.20. However, the positive thing is that the bulls bought the dips aggressively.
XRP–USD daily chart. Source: Tradingview
Currently, the bulls are attempting to push the 3rd-ranked cryptocurrency on CoinMarketCap above the 20-day EMA ($0.20).
If successful, an up move to the downtrend line is possible. A breakout of the downtrend line will signal strength and can result in a rally to the $0.23612-$0.24770 resistance zone.
On the other hand, if the XRP/USD pair turns down from the downtrend line, the bears will make another attempt to break the $0.17372 support. If that happens, a drop to $0.14 is possible.
Bitcoin Cash (BCH) has been consolidating between $200 and $280.47 for more than a month. When the price is stuck in such a large range, traders can buy near the support and sell near the resistance.
BCH–USD daily chart. Source: Tradingview
The 5th-ranked cryptocurrency on CoinMarketCap turned down from the resistance of the range on May 9 and plunged to a low of $217.55 on May 11. Although the bulls purchased this dip, they have not been able to propel the price above the 20-day EMA ($243), which suggests a lack of momentum.
If the BCH/USD pair turns down from the current levels, a drop to $200 is possible. Conversely, if the bulls can push the price above the 20-day EMA, a move to $280.47 is likely.
Bitcoin SV (BSV) fell from close to the resistance of the range to the support of the range within two days. The bulls purchased the drop to the support of the range at $170 on May 10 and 11, which is a positive sign.
BSV–USD daily chart. Source: Tradingview
This increases the possibility of a range-bound movement in the 6th-ranked cryptocurrency on CoinMarketCap. A break above the 20-day EMA ($197) can carry the price to the top of the range at $227. Above this level, a new uptrend is likely.
Conversely, if the BSV/USD pair turns down from the current levels, the bears might make one more attempt to sink the price below $170. If successful, a downtrend will begin.
Litecoin (LTC) turned down from the downtrend line and nosedived below the moving averages and made an intraday low of $39.3920 on May 10. This triggered the recommended stop-loss on the long positions at $42.
LTC–USD daily chart. Source: Tradingview
Although the bears attempted to sink the 7th-ranked cryptocurrency on CoinMarketCap below $39 on May 10 and 11, they could not do so. This suggests that buyers stepped in closer to this level.
However, the bounce off the $39 levels has not been able to sustain above the 50-day simple moving average ($43). This suggests that demand dries up at higher levels. If the LTC/USD pair turns down from the current levels, a retest of $39 is possible. A break below this level will start a downtrend.
Conversely, if the bulls can drive the price above the downtrend line, a rally to the $50.7864-$52.2803 range is possible.
The sharp fall in Binance Coin (BNB) on May 10 triggered the stop-loss on the long positions as suggested in the previous analysis. The bulls aggressively defended the critical support at $13.65 on May 10 and 11.
BNB–USD daily chart. Source: Tradingview
This suggests that the 8th-ranked crypto-asset on CoinMarketCap is likely to be range-bound for the next few days.
Currently, the bulls are facing a stiff resistance at the 20-day EMA ($16.21). If the BNB/USD pair turns down from this level, the boundaries of the range are likely to be $16.30-$13.65.
But if the bulls can propel the pair above the 20-day EMA and the downtrend line, a rally to $18.1377 is possible. A new uptrend is likely to begin if the bulls propel the pair above this resistance.
The failure of the bulls to break above the downtrend line attracted profit booking that dragged EOS below the uptrend line and the moving averages on May 10. That triggered the suggested stop loss on the long positions at $2.50.
EOS–USD daily chart. Source: Tradingview
Currently, the bulls are struggling to push the 9th-ranked cryptocurrency on CoinMarketCap above the moving averages. This suggests a lack of demand at higher levels.
If the EOS/USD pair does not rise above the downtrend line within the next few days, the bears will make another attempt to resume the downtrend.
The 20-day EMA ($2.64) has started to turn down and the RSI has plunged into the negative territory. This suggests that the bears are in command. If the pair sustains below $2.3314, the downtrend is likely to resume.
XTZ–USD daily chart. Source: Tradingview
Although the bears broke below the support line of the ascending channel on May 10 and 11, they could sustain the price below it. This suggests that the bulls are attempting to keep the 10th-ranked cryptocurrency on CoinMarketCap inside the channel.
If the bulls can break out and sustain the price above the 20-day EMA ($2.59), it will increase the possibility of a move back to $3.07369598. Hence, this can offer a buying opportunity.
This bullish view will be invalidated if the XTZ/USD pair turns around from the 20-day EMA and breaks below the 50-day SMA ($2.23). Such a move might signal the start of a new downtrend.
Stellar Lumens (XLM) has been in an uptrend for the past few weeks. With the sharp selloff on May 10 and 11, the bears attempted to change the trend but they could not sustain the price below $0.060.
XLM–USD daily chart. Source: Tradingview
This showed that the bulls were buying the dips to $0.060. On May 12, the 11th-ranked cryptocurrency on CoinMarketCap surged, which suggested that more buyers came onboard as the confidence picked up.
Currently, the up move is facing resistance at the uptrend line but the bulls have not given up much ground. This increases the possibility of a breakout of the uptrend line. If successful, the XLM/USD pair can rally to $0.076994.
The pair remains positive as long as it sustains above the $0.060 levels. A trend change will be signaled if the bears sink the pair below this support.
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 HitBTC exchange.