Institutional demand for Bitcoin remains high, even as the price turned down after the block reward halving. Some in the space believe that if institutional and retail demand picks up, there will be a severe shortage of (BTC), which can quickly push its price higher.
A small example can be seen in the way crypto fund manager Grayscale Investments has been lapping up Bitcoin, the top-ranked cryptocurrency on CoinMarketCap. Since the halving, Grayscale alone has bought about 150% of the newly mined Bitcoin. If this pace of purchasing continues for a few more weeks, traders’ sentiment could turn decidedly bullish.
Stocks usually react strongly to upgrades or downgrades by large brokerage houses or investment banks. However, the crypto community decided to go contra to Goldman’s recent warning to its clientele against investing in Bitcoin. This suggests that crypto traders do not give much weight to the reports by traditional brokerages.
Daily cryptocurrency market performance. Source: Coin360
The huge rise in Bitcoin’s price over the past decade has not happened due to support from the government or from the brokerage houses. It happened as people saw an opportunity in the possibility of a decentralized world. Digital Assets Data CEO Mike Alfred recently told Cointelegraph that as the world becomes more digital and virtual, the younger generation would be more interested in digital gold, rather than physical gold.
Today also marks the expiry of CME BTC Options contracts. Typically the expiry has led to a 2.3% drop in Bitcoin’s price. Usually, fluctuations caused due to derivatives expiry are short-term blips and they don't change the ongoing trend. Therefore, swing traders should initiate trades based on the trend and not so much on the CME expiry.
Bitcoin (BTC) broke above the 20-day exponential moving average ($9,151) on May 27 and followed it up with another strong up move on May 28. This suggests that the path of least resistance is to the upside.
BTC–USD daily chart. Source: Tradingview
However, the bears are unlikely to give up without a fight. They are mounting a strong resistance at the $9,600 level. If this level is scaled, a move to the resistance line of the symmetrical triangle is likely.
A breakout of the triangle will signal the possible start of the next leg of the uptrend. The pattern target following a breakout of the triangle is $11,828.
Conversely, if the BTC/USD pair turns down from the current levels, the bears will try to sink it back below the 20-day EMA. If successful, the next stop would be the support line of the symmetrical triangle. A break below this level will be a huge negative as the pattern target of the breakdown from the triangle is $6,752.
Ether (ETH) jumped above the neckline of the inverse head and shoulders pattern on May 28, which is a positive sign. There is a minor resistance at $227.097 above which the rally can extend to $257.
ETH–USD daily chart. Source: Tradingview
Currently, the bears are attempting to sink the 2nd-ranked cryptocurrency on CoinMarketCap back below the neckline. If the price sustains below the neckline, it will suggest that the current breakout was a bull trap.
A break below the 20-day EMA and the support at $191.692 could signal the start of a possible downtrend. Therefore, traders who have purchased on the recommendation given in the previous analysis can keep their stops at $200.
However, if the ETH/USD pair bounces off the neckline, the bulls will make one more attempt to clear the $220.097 hurdle. If successful, the uptrend is likely to resume. The upsloping moving averages and the relative strength index above 60 levels suggest that bulls have the upper hand.
The bears are defending the downtrend line. If XRP turns down from the current levels, the bears will try to drag the price towards the critical support at $0.17372. A breakdown of this support will be a huge negative as it is likely to start a new downtrend.
XRP–USD daily chart. Source: Tradingview
Conversely, if the bulls can propel the 3rd-ranked cryptocurrency on CoinMarketCap above the downtrend line and the horizontal resistance of $0.20570, a move to $0.22504 and then to $0.23612 is possible.
Traders who don’t own long positions can buy if the XRP/USD pair sustains above $0.20570 for a few hours. The stop-loss for this trade can be kept at $0.19.
Bitcoin Cash (BCH) had broken above the 50-day simple moving average ($238) today but the bulls are facing stiff resistance at higher levels. If the price turns down and slips back below the moving averages, a drop to $217.55 is likely.
BCH–USD daily chart. Source: Tradingview
If the bears sink the 5th-ranked cryptocurrency on CoinMarketCap below $217.55, a drop to $200 and then to $166 is possible. Therefore, traders can avoid holding long positions below $217.
Conversely, if the BCH/USD pair rebounds off the moving averages, a move to $255.46 and then to $280.47 is possible. This level is likely to act as a stiff resistance but if crossed, a new uptrend is likely.
The bulls are facing stiff resistance at the downtrend line. If Bitcoin SV (BSV) turns down from the current levels, a drop to $170 is possible. If the bulls defend this level aggressively, the consolidation is likely to extend for a few more days.
BSV–USD daily chart. Source: Tradingview
However, if the bears sink the 6th-ranked cryptocurrency on CoinMarketCap below $170, a new downtrend is likely. The first support on the downside is $145 and then $120. Therefore, traders can protect their long positions with a stop below $170.
On the other hand, if the bulls can scale the price above the downtrend line, a rally to $227 is possible. A break above this level will signal the start of a new uptrend. However, if the price turns down from this resistance, the range-bound action is likely to continue for a few more days.
Litecoin (LTC) has reached the downtrend line. If the bulls can propel the price above this resistance, a rally to $50.7864 is possible. A break above this resistance will invalidate the developing H&S pattern.
LTC–USD daily chart. Source: Tradingview
Therefore, traders can look for buying opportunities on a breakout and close (UTC time) above $50.7864.
Conversely, if the 7th-ranked cryptocurrency on CoinMarketCap turns down from the downtrend line, it can drop to $41.7 and then to $39.
If the LTC/USD pair bounces off the supports, the range-bound is likely to continue. The trend will turn in favor of the bears on a break below $39.
The bulls have carried Binance Coin (BNB) to the downtrend line but are struggling to scale the price above it. This suggests that bears are defending this level aggressively.
BNB–USD daily chart. Source: Tradingview
However, if the bulls can keep the 8th-ranked crypto-asset on CoinMarketCap above the moving averages, it will increase the possibility of a break above the downtrend line. Above this level, a rally to $18.1377 is likely.
The BNB/USD pair is likely to pick up momentum above $18.1377, which can offer a buying opportunity to the traders.
Conversely, if the pair slips below the moving averages, a drop to $14.95 and then to $13.65 is possible.
EOS continues to be in a range with both the bulls and bears playing it safe. Although the bulls have managed to push the price above the moving averages, the breakout lacks momentum.
EOS–USD daily chart. Source: Tradingview
Both moving averages are flat and the RSI is just above the midpoint, which suggests a balance between supply and demand.
If the 9th-ranked cryptocurrency on CoinMarketCap sustains above the moving averages, a rally to $2.8319 is possible. On the other hand, if the price drops below the moving averages, a decline to $2.3314 is likely.
The next trending move is likely to start on a breakout above $2.8319 or on a breakdown below $2.3314. Therefore, until then, traders can remain on the sidelines.
Although the bulls have managed to drive Tezos (XTZ) above the downtrend line on May 28, the breakout lacks momentum. This suggests hesitation by the bulls at higher levels. The failure to sustain the price above the downtrend line is likely to attract selling.
XTZ–USD daily chart. Source: Tradingview
If the bears sink the 10th-ranked cryptocurrency on CoinMarketCap back below the downtrend line, a drop to the 20-day EMA ($2.70) is likely. This is an important support to watch out for because if this breaks, a drop to $2.5795 is possible.
Therefore, traders can keep a stop-loss of $2.57 on the long positions initiated as suggested in the previous analysis.
However, if the XTZ/USD pair bounces off the downtrend line, it will indicate strength. Such a move can result in a rally to $3.07 and then $3.27.
Cardano (ADA) surged on May 28 and broke above the overhead resistance of $0.0619885. Traders who bought after the suggestion in the previous analysis are likely to be sitting on profits. They can either book complete profits at the current levels or book profits on a major portion and trail the rest with a tight stop-loss.
ADA–USD daily chart. Source: Tradingview
After the sharp rally on May 28, a few days of consolidation or a minor correction is possible. If the bears sink the 11th-ranked cryptocurrency on CoinMarketCap below $0.0619885, the pullback is likely to deepen further to $0.05928.
Conversely, if the bulls defend the immediate support at $0.0619885, the ADA/USD pair is likely to attempt a rally to $0.0722722. The bullish view will be negated if the pair dips back to $0.055. However, the possibility of such a drop looks dim.
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.