Bitcoin appears to have bottomed at $6,500 and once confirmed many cryptocurrencies could provide lucrative trading opportunities at a good risk-reward ratio.
Bitcoin price continues to trade with an advantage to bears but this does not mean investors or miners have capitulated. About 64% of the total Bitcoin mined to date has been dormant in wallets since 2018. This shows that Bitcoin hodlers do not believe in trading for short-term gains, as they anticipate much higher prices in the future. While this might be a feasible strategy for the whales, retail traders can rake up profits if they buy during periods of deep distress and sell their positions during times of euphoria.
One of the events that many hopeful investors are anticipating is Bitcoin’s block reward halving in May 2020. However, Jason Williams, co-founder at digital asset fund Morgan Creek Digital, believes that the halving will be a non-event that will not affect the price of Bitcoin. While a few analysts share Williams’ view, others believe that history will repeat itself and the price of Bitcoin will surge as the halving occurs.
Daily cryptocurrency market performance. Source: Coin360
The crypto market is driven by more than just fundamentals and technical analysts currently have a variety of views and opinions about the market. DeMark Analytics CEO Tom DeMark, recently told Bloomberg that he expects Bitcoin to continue its fall with a minimum target objective of $6,308 and if panic sets in, the decline can extend to $5,294. On the other hand, popular Twitter analyst PlanB has said that Bitcoin might rally to $10,000 in before the end of December.
These differences show that every analyst has a unique style of analyzing the markets. Therefore, traders should do their own due diligence before initiating any positions. Let’s see if we spot any buy setups today?
Bitcoin (BTC) has turned down from the 20-day EMA, which suggests that sellers are active at resistance levels. The bears will now try to sink and sustain the price below the support at $7,337.78. If successful, a drop to $6,840.75 and below it to $6,512.01 is likely. The downsloping 20-day EMA and the RSI in the negative zone suggest that bears have the upper hand.
BTC USD daily chart. Source: Tradingview
However, the pace of decline from the 20-day EMA has been gradual. This shows that the selling pressure is weakening.
If the BTC/USD pair bounces off current levels or from $6,840.75, it will signal buying on the dips. The next move above the $7,900 is likely to carry the price to the downtrend line, which will act as a stiff resistance.
However, once the bulls push the price above the downtrend line, a new uptrend is likely. We will recommend long positions if the price action signals a return of buyers.
Although bulls pushed Ether (ETH) above $151.829, they could not sustain this level. This shows that buying dries up at higher levels. The altcoin can now dip to $140 and below it to $131.484. The downsloping moving averages and the RSI in negative territory indicate that the bears are in the driver’s seat.
ETH USD daily chart. Source: Tradingview
Our bearish view will be invalidated if the ETH/USD pair turns around from the current levels and scales above the 20-day EMA. Such a move will open the doors for a rally to $197.75. We might suggest long positions above 20-day EMA. Until then, we remain in a wait and watch mode.
The relief rally in XRP could not reach the 20-day EMA, which indicates that demand dries up at higher levels as the buyers are not confident that a bottom is in place. The price has again dipped to the support at $0.22. The 20-day EMA is sloping down and the RSI is in the negative zone, which increases the possibility of a drop to $0.20041. If this support cracks, the downtrend can extend to $0.18.
XRP USD daily chart. Source: Tradingview
Our bearish view will be invalidated if the XRP/USD pair turns around from the current levels and breaks out of the overhead resistance at $0.24508. If that happens, the pair can move up to the 50-day SMA and above it to $0.31503. We will wait for the price to sustain above $0.24508 before turning bullish.
Bitcoin Cash (BCH) has turned down from just under the 20-day EMA. It is likely to retest the support zone at $203.36 to $192.52. With the 20-day EMA sloping down and the RSI in the negative zone, the advantage is with the bears. A break below $192.52 will resume the downtrend.
BCH USD daily chart. Source: Tradingview
However, if the BCH/USD pair finds support closer to $203.36, it will signal buying on dips. If the subsequent rebound can cross above the recent high of $227.01, it will increase the possibility of a rally to $306.78. There is a minor resistance at the 50-day SMA but we expect it to be crossed.
The bulls could not carry Litecoin (LTC) above the $50 to $47.1851 overhead resistance zone. Currently, the price has again dipped towards the recent lows of $42.0599. This is an important level to watch out for because if it cracks, the downtrend can extend to $36. The downsloping 20-day EMA and the RSI in the negative territory indicate that the bears are in command.
LTC USD daily chart. Source: Tradingview
However, if buying at the current levels again props up the LTC/USD pair, we anticipate another attempt by the bulls to breakout of $50. If successful, a move to the 50-day SMA and above it to $66.1486 is possible. We will wait for the price to sustain above $50 before suggesting a trade in it.
EOS is facing resistance at the 20-day EMA. However, the positive thing is that the price has not turned down sharply. This suggests that the selling pressure has reduced but as long as the price remains below the 20-day EMA, the advantage will be with the bears.
EOS USD daily chart. Source: Tradingview
If the EOS/USD pair slips below $2.6333, a retest of the critical support at $2.4001 is possible. Below this support, the decline can extend to $1.55.
On the other hand, if the price reverses direction from the current levels and breaks out of the 20-day EMA, it can move up to the 50-day SMA. On a break above the 50-day SMA, the rally can reach $3.69. We will wait for a buy setup to form before proposing a trade in it.
Binance Coin (BNB) is range-bound between $16.50 and $14.2555. The 20-day EMA is sloping down and the RSI is in the negative zone. This shows that bears have the upper hand. If the price slips below the support of the range, a drop to $11.30 is likely.
BNB USD daily chart. Source: Tradingview
However, if the bulls defend the next dip to $14.2555, the BNB/USD pair will extend its stay inside the range. It will signal strength on a breakout of the overhead resistance at $16.50. The longer price stays inside a range, the stronger the next move will be. Therefore, we will recommend a long position after the price sustains above $16.50. Until then, we suggest traders remain on the sidelines.
Bitcoin SV (BSV) turned down from $113.96 and broke below the small ascending triangle formation. This invalidates the bullish setup and increases the possibility of a retest of the minor support at $92.693.
BSV USD daily chart. Source: Tradingview
If the bulls defend the support at $92.693, the BSV/USD pair will remain range-bound for a few more days. It will signal strength on a breakout of the 50-day SMA. Nonetheless, if the bears sink the price below $92.693, a drop to $78.506 is possible. We do not find any reliable buy setups at the current level, hence, we remain neutral on the pair.
As explained in the previous analysis, a weak rebound from a strong support level is a negative sign. Stellar (XLM) has again dropped down to the critical support zone of $0.056 to $0.051014. The 20-day EMA is sloping down and the RSI is in negative territory, which suggests that bears are in command.
XLM USD daily chart. Source: Tradingview
If the bears succeed in sinking the price below the support zone, the downtrend will resume. The next support to watch on the downside is $0.041748.
However, if the XLM/USD pair rebounds from the support zone and breaks above $0.059956, it will signal a likely bottom. We will wait for a reversal pattern to form before recommending a trade in it.
The bulls are struggling to propel Tron (TRX) above the 20-day EMA. This shows a lack of demand at higher levels. Repeated failure to break above a resistance attracts sellers. The bears will now attempt to drag the price to the critical support at $0.0136655.
TRX USD daily chart. Source: Tradingview
If the TRX/USD pair plummets below the support at $0.0136655, a drop to the $0.0116262 to $0.011240 support zone is possible. Conversely, if the price turns around from the current levels and breaks out of the 20-day EMA, the pair can move up to the 50-day SMA where it is again likely to face selling pressure. We will wait for the price to sustain above the 20-day EMA before turning positive.
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.