Even after the announcements of massive stimulus by the U.S. Federal Reserve, the ECB, and several other central banks, the equity markets are still struggling to launch a sharp recovery from the recent lows. This shows that traders are not confident that the equity markets have bottomed out and possibly investors are slowly losing hope that the central banks can rescue them from any crisis.
Meanwhile, the cryptocurrency market is showing a sharp rally from the recent lows. The total crypto market capitalization has risen from the recent low of about $118 billion on March 13 to about $191 billion on March 20, which is a rally of about 62%. This shows that the crypto traders are using the dips during panic selling to accumulate for the long-term.
Daily cryptocurrency market performance. Source: Coin360
The sharp increase in the balance sheets of the central banks is likely to result in high inflation down the road. BitMEX Research believes that “in this changed economic regime, where the economy and financial markets are set loose,” Bitcoin has a great opportunity to prove its worth.
Fundstrat Global Advisors technical researcher Rob Sluymer wrote in a recent note that “Bitcoin will likely need months of consolidation to repair the technical damage now in place.”
Nonetheless, we do not expect the recovery to be a long drawn one, especially with the Bitcoin halving due in about two months. Let’s analyze the charts of the major cryptocurrencies to determine the levels, which will signal a change in trend.
Bitcoin (BTC) has seen strong buying from close to the $5,000 levels, which is a huge positive. This shows that the market participants believe that the largest cryptocurrency has put a bottom at $3,803.58.
BTC USD daily chart. Source: Tradingview
Currently, the bears are defending the resistance at the 20-day EMA. If the BTC/USD pair turns down from the current levels, we expect the bulls to step in closer to the support line of the ascending channel.
If the pair bounces off the support line of the channel and rises above the 20-day EMA, a move to the 200-day EMA at $8,448 and above it to $10,500 is possible.
Contrary to our assumption, if the pair turns down from the 20-day EMA and plummets below the support line of the channel, it can result in a fall to $5,000. We expect strong buying to emerge at these levels.
Though we are positive, we suggest traders wait for the rally to prove itself before jumping in to buy. We will watch the price action for a couple of days more and then suggest a trade in it.
The momentum in Ether (ETH) picked up after it broke above the downtrend line. This is a positive sign. The bulls are currently facing resistance at $155.612. If the biggest altcoin turns down from this level, a drop to $117.909 is possible.
ETH USD daily chart. Source: Tradingview
If the bulls purchase the next dip to $117.090, it will indicate buying on dips. This might also signal that the bottom is in place and a new uptrend is likely. This will offer a buying opportunity in the ETH/USD pair.
Conversely, a drop below $117.090 will indicate that the sellers continue to be active at higher levels and a drop to $100 will be on the cards.
XRP has recovered to the overhead resistance of $0.17468. The bears are likely to mount a stiff resistance between $0.17468 and the 20-day EMA at $0.187. However, if the momentum can carry the price above the channel, a change in trend is likely.
XRP USD daily chart. Source: Tradingview
On a close (UTC time) above the channel, the XRP/USD pair can rally to the 200-day SMA at $0.24460.
However, if the pair turns down from the current levels, a drop to the uptrend line is likely. If this support holds, it will signal demand at lower levels and might offer a buying opportunity. Conversely, if the bears sink the pair below the uptrend line, it will be a huge negative and can result in a retest of the recent lows at $0.114.
Bitcoin Cash (BCH) has recovered sharply from the lows and is currently attempting to rise above the 20-day EMA, which has been acting as a stiff resistance since Feb. 18. A breakout above the 20-day EMA and the descending channel will be a huge positive and will signal a possible change in trend.
BCH USD daily chart. Source: Tradingview
Above the descending channel, the bulls can carry the price to $360. Though the 200-day SMA at $276 and the horizontal level of $306.78 might offer resistance, we expect these to be crossed.
On the other hand, if the BCH/USD pair turns down from the current levels, it can dip to $200 and below it to $169.62. We will watch the price action above the channel and then suggest long positions.
Bitcoin SV (BSV) is attempting to break out of the descending channel. If successful, it will signal a probable change in trend. Above the channel, the next level to watch out for is $236 where we anticipate the bears to step in once again.
BSV USD daily chart. Source: Tradingview
If the BSV/USD pair turns down from $236, it might remain range-bound for a few more days before making its next move. However, if the bulls can drive the pair above $236, a rally to $337.80 will be on the cards.
Our positive view will be invalidated if the bulls fail to propel the price above the channel. In such a case, the pair will extend its stay inside the channel.
Litecoin (LTC) has broken above the $35.8582-$38.8015overhead resistance zone. This is a positive sign as it signals buying at lower levels. However, we expect the bears to aggressively defend the 20-day EMA.
LTC USD daily chart. Source: Tradingview
If the bulls hold the next dip above the uptrend line, it will signal strength. The traders can wait for the bounce off the uptrend line to close (UTC time) above the descending channel to enter long positions. We will suggest a stop loss after the buy recommendation gets triggered.
Conversely, if the bulls fail to push the price above the descending channel, the LTC/USD pair might again dip to the uptrend line. Below this level, a drop to the support line of the descending channel is possible.
The bulls are attempting to push EOS above the overhead resistance zone of $2.1624-$2.4001. If successful, a move to the 20-day EMA is likely. The three previous attempts to rally faced stiff resistance at the 20-day EMA, hence, we expect the bears to aggressively defend this level once again.
EOS USD daily chart. Source: Tradingview
If the EOS/USD pair turns down from the 20-day EMA but finds support at the uptrend line, it will signal buying on dips. This will present a buying opportunity.
However, if the bears sink the price below the uptrend line, it will signal an advantage to the bears and a drop to $1.7213 is possible. The next dip will give us a likely confirmation of whether the bottom is in place or not.
The bulls propelled Binance Coin (BNB) above the overhead resistance at $12.1111. This has turned the sentiment positive in the short-term. However, the bears will attempt to stall the relief rally at the 20-day EMA.
BNB USD daily chart. Source: Tradingview
If successful, the BNB/USD pair might dip back to the uptrend line. A bounce off this line will be a positive sign and will signal a change in sentiment from sell on rallies to buy on dips. That might present a buying opportunity.
The first target on the upside is the downtrend line, closer to $17. Conversely, if the bulls fail to defend the uptrend line, a drop to $8.4422 is possible.
Tezos (XTZ) rallied and closed (UTC time) above the 200-day SMA on March 19, which shows that bulls are back in the game. We anticipate the bears to mount a stiff resistance at the 20-day EMA at $2.06, which is just above the horizontal resistance at $1.955.
XTZ USD daily chart. Source: Tradingview
We also spot early signs of an ascending triangle pattern developing. If this pattern completes, it will have a minimum target objective of $2.9004. Above this level, the rally can extend to $3.3367 and above it to $3.50.
Conversely, if the XTZ/USD pair turns down from the overhead resistance and dips below the trendline of the triangle, a retest of $1.1349 and below it $1.0096 is possible.
UNUS SED LEO (LEO) has been a slow mover in the past few days. It neither fell dramatically along with the other major cryptocurrencies in the past few days nor is it showing signs of strong buying at the current levels.
LEO USD daily chart. Source: Tradingview
The LEO/USD pair remains stuck inside a $0.9081-$1.04 range since early-Feb. of this year. A breakout and close (UTC time) above $1.04 will complete a bullish inverse head and shoulders setup that can result in a move to $1.27488 and above it $1.36.
However, if the bulls fail to propel the pair above $1.04 and sustain it, a few more days of range-bound action is possible. A break below $0.9081 will shift the balance in favor of the bears.
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.