Several economies around the globe are lifting lockdown restrictions that have been in place for the past few weeks. This will enable businesses to gradually get back on track and investors are also closely watching the various coronavirus vaccines that are in developmental stages. Any positive news on this front is likely to boost sentiment.
As the globe is flush with liquidity, any improvement in sentiment could drive traders into risky assets in order to generate strong returns to make up for this year’s losses. Bitcoin (BTC) has done exceedingly well during the crisis, which is likely to attract the attention of institutional players.
Even if a fraction of the massive liquidity in the system flows into cryptocurrencies, it is likely to result in a new bull run in the crypto sector.
Daily cryptocurrency market performance. Source: Coin360
On the other hand, if the vaccine trials prove unsuccessful and the world is hit by a second wave of coronavirus, the United States Federal Reserve is likely to continue printing money. In a recent interview, the Federal Reserve Chairman Jerome Powell said that the Fed could expand its lending programs for “as long as we need to.”
If this happens, investors will look for new opportunities to safeguard their purchasing power and generate yields. This is also likely to benefit Bitcoin, the top-ranked cryptocurrency on CoinMarketCap. Under both circumstances, the cryptocurrency is likely to be the beneficiary.
Bitcoin (BTC) is in an uptrend. Hence, the sentiment is to buy the dips and the breakouts. However, the bulls are finding it difficult to break above the psychological resistance at $10,000.
BTC–USD daily chart. Source: Tradingview
Twice, the price has reversed direction from the $10,000 levels. If the bears again succeed in defending this level, then a drop to the 20-day exponential moving average ($9,025) is possible.
With both moving averages sloping up and the relative strength index above 60 levels, the bulls have the upper hand. Therefore, a rebound off the 20-day EMA can offer a buying opportunity to the traders.
If the bulls propel the BTC/USD pair above $10,000, a rally to the resistance line of the symmetrical triangle close to $10,600 is possible. Above this level, the momentum is likely to pick up and a sustained uptrend is likely.
The first sign of weakness will be a drop below the 20-day EMA and the bears will gain strength if they can sink the pair below the uptrend line.
Ether (ETH) broke above the downtrend line on May 17, which presented a buying opportunity to the traders as suggested in the previous analysis. Currently, the bears are defending the midpoint of the ascending channel.
ETH–USD daily chart. Source: Tradingview
If the bulls can drive the second-ranked cryptocurrency on CoinMarketCap above $220, a move to $227.097 and then to the resistance line of the channel at $245 is possible. A breakout of the channel will be a huge positive, as it can result in a rally to $288.599.
Conversely, if the ETH/USD pair turns down from the current levels and breaks below the support line of the channel, a drop to $176.103 is likely. Below this level, the trend is likely to favor the bears.
XRP has been struggling to climb above the $0.20570 resistance for the past few days. This suggests that the bears are defending this level aggressively. Today, though the price rose to an intraday high of $0.208, the bulls have not been able to sustain the higher levels.
XRP–USD daily chart. Source: Tradingview
This suggests that the bulls are likely to find it difficult to break above the zone between $0.20570 and the downtrend line.
If the 3rd-ranked cryptocurrency on CoinMarketCap turns down from the current levels, it can drop to the 50-day simple moving average ($0.197) and if this level also cracks, a retest of $0.17372 will be on the cards.
However, if the bulls can push the XRP/USD pair above the downtrend line, a rally to $0.23612 is possible. A breakout of this level will be a huge positive and can result in a move to the long-term downtrend line close to $0.27.
Bitcoin Cash (BCH) has roughly been trading inside a tight range of $230–$250 for the past few days. This suggests that both the bulls and the bears are not placing any large directional bets.
BCH–USD daily chart. Source: Tradingview
A break above $250 will suggest a minor advantage to the bulls. Above this level, a rally to $280.47 is possible. The 5th-ranked cryptocurrency on CoinMarketCap has turned down from this level thrice before, hence, the bears will again mount a strong defense at $280.47.
Alternatively, if the BCH/USD pair turns down from the current levels and plunges below $230, a drop to $200 is likely. As this level has held on three previous occasions, it can offer a buying opportunity.
Bitcoin SV (BSV) continues to trade inside the $170–$227 range. Although the bulls have pushed the price above the 20-day EMA ($195), they have not been able to scale the downtrend line.
BSV–USD daily chart. Source: Tradingview
This suggests that the bears are aggressively defending the downtrend line. Even if the bulls push the sixth-ranked cryptocurrency on CoinMarketCap above the downtrend line, they are again likely to face stiff resistance at $227. The momentum is likely to pick up if the price sustains above $227.
If the BSV/USD pair turns down from the current levels, a drop to $170 is possible. The trend will turn in favor of the bears on a break below $170. Trading inside the range will continue to be volatile and difficult to predict.
Litecoin (LTC) has climbed above the 20-day EMA ($44.3) but is facing resistance at the downtrend line. The flat moving averages and the RSI close to 50 levels suggests a balance between bulls and bears.
LTC–USD daily chart. Source: Tradingview
If the seventh-ranked cryptocurrency on CoinMarketCap can climb above the downtrend line, a move to $50.7864 is possible. The bears are likely to defend this level aggressively. If the price turns down from this resistance, the range-bound action is likely to continue for a few more days.
Conversely, if the bulls can drive the LTC/USD pair above $52.2803, a new uptrend is likely. The first target objective is $64.
However, if the price turns down from the current levels, the bears will attempt to sink the pair to $39.
Binance Coin (BNB) has gradually moved up to the downtrend line where it is facing resistance. This suggests a lack of urgency among the bulls to buy at these levels as they are not confident of the rally continuing.
BNB–USD daily chart. Source: Tradingview
Above the downtrend line, a retest of $18.1377 is possible. On the other hand, if the BNB/USD pair turns down from the current levels, a drop to the 50-day SMA ($15.5) is likely.
Although EOS broke above the downtrend line, it is struggling to pick up momentum. This suggests a lack of demand at higher levels. Both moving averages are flat and the RSI is close to the midpoint, which suggests a balance between demand and supply.
EOS–USD daily chart. Source: Tradingview
If the ninth-ranked cryptocurrency on CoinMarketCap turns down from the current levels or the overhead resistance of $2.8319 and plummets below the critical support at $2.3314, the bearish head and shoulders pattern will complete.
This setup has a target objective of $1.5524, which will tilt the advantage in favor of the bears. However, unless the EOS/USD pair breaks below $2.3314, the H&S pattern will not complete. Therefore, traders should not jump the gun and become negative.
If the bulls can push the price above $2.
8319, a move to the $3.1104–$3.1802 resistance zone is possible. A breakout of this zone will invalidate the bearish setup, which will be a huge positive.
Although the bears broke below the support line of the ascending channel on May 15, they could not sustain the breakdown. This suggests demand at lower levels. On May 16, Tezos (XTZ) rallied above the 20-day EMA, which was a good buying opportunity as suggested in the previous analysis.
XTZ–USD daily chart. Source: Tradingview
The first target objective is a move to the downtrend line where the bears might again mount a stiff resistance. Traders can book partial profits if the bulls struggle to push the price above the downtrend line.
This bullish view will be invalidated if the XTZ/USD pair turns down and breaks below the channel. The trend is likely to turn negative on a break below $2.24.
Stellar Lumens (XLM) broke above the downtrend line on May 17 but could not sustain the higher levels. Today, the bulls are again attempting to sustain the price above the downtrend line. If successful, a rally to $0.076994 is possible.
XLM–USD daily chart. Source: Tradingview
Conversely, if the bulls fail to sustain the 11th-ranked cryptocurrency on CoinMarketCap above the downtrend line, the bears will attempt to sink the price below the 20-day EMA ($0.0675).
If successful, a drop to the uptrend line is likely. This is an important support because if it cracks a retest of $0.060 will be on the cards.
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.