Price Analysis, March 02: Bitcoin, Ethereum, Bitcoin Cash, Ripple, Stellar, Litecoin, Cardano, NEO, EOS
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The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
The market data is provided by the HitBTC exchange.
Bitcoin trading volume is languishing at about half of the average seen during its December peak. While a few believe that this is a sign of an approaching bear market in Bitcoin, we don’t agree with that point of view.
During the frenzy, as seen in December of last year, it is natural to have a surge in volume because traders throw caution out of the window and invest using leverage. Additionally, during a roaring bull market, many newbies enter the markets to make a quick buck. A combination of these leads to a spike in volume.
When prices fall, most newbies are stuck with their positions because they rarely use a stop loss. Many among them would have also purchased in a falling market, exhausting their purchasing power. The only option they see now is to hold until the market recovers. This portion of the volume will not return until a price reaches the December highs.
Cautious traders also don’t venture out in a falling market because it is always better to trade in a market that is in a clear uptrend. Both these reasons combined have led to a fall in volume.
Though we do keep an eye on the volume, we should not get worried about this fact, because we analyze the price action and use it for our trading decisions.
In our previous analysis, we had recommended booking profits on half positions around the $10,700 mark and trailing the rest because a breakout of the $11,400 to $12,200 resistance zone will complete an inverted head and shoulders pattern, which will be bullish for Bitcoin.
Currently, the bulls are attempting to break out of the descending channel and move towards the neckline of the inverted H&S pattern. The moving averages are on the verge of a bullish crossover.
All of this indicates that the bulls have an upper hand right now. Hence, chances are that the price will continue to rise in the ascending channel. The BTC/USD pair will gain momentum above $12,200.
However, as traders, we have to be ready for any turn of events. If prices fail to break out of $12,200, chances are the cryptocurrency will become range bound between $9,500 and $12,200 for the next few days.
Therefore, traders should watch the price action at the $12,200 mark carefully and book profits if they find that Bitcoin is not able to break out of it.
Ethereum is underperforming. For the past five days, it has been struggling to break out of the 20-day EMA. In our previous analysis, we had asked traders to raise their stops to breakeven on half position and hold the rest with a stop at $780.
If the ETH/USD pair breaks and sustains below the trendline of the ascending triangle pattern, it will be a bearish development, which can sink it to $780 levels. Therefore, traders can raise the stops on the complete position to breakeven, which should be around the $830 mark.
The first sign of a positive move will be when the cryptocurrency breaks out of the 20-day EMA. But it will gain momentum only after it breaks out and sustains above $980.
Bitcoin Cash continues to trade inside the range between $1,150 and $1,355. The longer it trades within this range, stronger will be the breakout. Therefore, we shall look to buy the breakout of the range.
Traders can buy the breakout and close (UTC) above the $1,355 levels with a $1,125 stop loss. Though the pattern target of the breakout of the range is only $1,560, we believe that the BCH/USD pair will rally to $1,600 and after that to $1,800 levels.
Our bullish view will be invalidated if the price breaks down of the range.
The buyers seem to have abandoned Ripple because, for the past eight days, it has been trading inside the range of $0.85 to $0.98669.
If the XRP/USD pair breaks out of the range, it is likely to rally to $1.12 levels where it will face resistance from the 50-day SMA. Once above this level, a move to $1.23 is likely.
On the other hand, a breakdown of the $0.85 levels can push the cryptocurrency down to the $0.72 levels. We are unsure of the direction of the next move, hence, have mentioned the result for both possibilities.
The bears continue to dominate the trading action in Stellar. It is currently at the $0.32 critical support. If this level breaks, it might fall towards the support line of the descending channel two. We anticipate it’ll face strong support between $0.20 to $0.22 levels.
On the contrary, if the bulls succeed in defending the $0.32 levels, the 20-day EMA and the 50-day SMA are likely to offer a strong resistance on any pullback.
We shall change our view to bullish if the XLM/USD pair sustains above the $0.48 levels.
Litecoin is one of the few coins that is trading above both the moving averages. This made us very bullish on it. However, we were proven wrong because this did not result in any up move. We had recommended traders to buy closer to $200 on Feb. 23 and in our previous analysis, we had suggested raising the stop to breakeven.
We did so because the 20-day EMA has been providing support for the past two days. If this level breaks, a fall to the 50-day SMA is likely. Also, both moving averages have flattened out, which points to a range bound action in the short-term.
The bulls now have an uphill task as they will face resistance at the $220 levels from the downtrend line and $240. We shall turn marginally positive after the LTC/USD pair sustains above $220.
We expect a small bounce from the 0.0000246 levels, but the bounce is likely to face stiff resistance at the 20-day EMA and the downtrend line.
We may turn positive on the ADA/BTC pair only after it breaks out of the 0.00004070 levels.
We have been bullish on NEO because it broke out of the bearish descending triangle pattern on Feb. 26. Therefore, we had recommended to buy it at $126 levels with the stop at $105. However, the price has not moved according to our expectation.
The NEO/USD pair has turned down sharply from the overhead resistance at $140. If the price fails to find support at $120 levels, it is likely to fall to the next immediate support of $110. We believe this zone to offer strong support. Therefore, we have retained the stop loss at $105.
Both the moving averages are flattening out, which suggests a range bound action for a few days.
On the upside, the cryptocurrency will gain momentum only above $140.
On the other hand, a breakout of the triangle will carry it towards the upper end of the range at $10.119.
Inside the triangle, the price movement is likely to remain volatile. We shall wait for the prices to break out of the 50-day SMA before recommending any long positions in the EOS/USD pair.