Technical analysis on top 9 cryptocurrencies.
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.
A survey by Thomson Reuters shows that one in five financial institutions is planning to start cryptocurrency trading within the next 12 months. The survey included large banks, hedge funds and asset managers. This will probably mean a huge flood of fresh money will vie for the limited number of digital cryptocurrencies.
Goldman Sachs has already made the first move as it has hired a crypto trader, Justin Schmidt, to head its digital asset markets division. As soon as one investment bank enters this space, the others will also take the plunge.
Investor Tim Draper has said that Bitcoin is bigger than the internet, the industrial revolution, the Renaissance and the Iron Age.
The exchanges are also recognizing the need to strengthen their services. 16 exchanges in Japan registered with the government’s Financial Services Agency have formed an association, Nihon Kasotsuka Kokangyo Kyokai (Japan cryptocurrency exchange association) to impose self-regulation and improve security.
All these steps point to a market that is maturing and will offer numerous opportunities in the future. So, when the long-term picture is so good, why do we trade instead of just buy and “hodl”?
While the long-term picture is impressive, the short-term volatility remains. We attempt to use the volatility to our benefit and increase our trading capital.
The cryptocurrencies are volatile by nature and tend to give up their gains very quickly. That’s why we prefer to book partial profits at resistances and trail the stops higher.
The trendline has failed to offer support. The BTC/USD pair can now slide to the 20-day EMA.
If the moving average also doesn’t show any support, the slide can extend to $8,000. Therefore, we suggest retaining the stops on the remaining position at breakeven.
Why are we not raising the stops on the complete position higher?
The moving averages have completed a bullish crossover. We anticipate some buying to happen at the $8,770 mark. If our expectation is proven correct, the virtual currency should again attempt to break out of $10,000 and rally to $12,000 levels. Therefore, we have given some wriggle room by keeping the stops at breakeven.
We had been waiting for a move to $745 but Ethereum turned down from $712 on April 24. It is currently taking support at $600 levels.
If the support holds, we should see another attempt to rally to $745 levels.
But, if the support zone between $600 and the trendline breaks, the ETH/USD pair can slide to the 20-day EMA.
We don’t have any positions in the cryptocurrency because we never got a low-risk entry opportunity. We shall wait for a new setup to develop to initiate any long positions.
Bitcoin Cash came very close to our third target objective of $1,600 when it reached an intraday high of $1,590.7825 on April 24. We had mentioned that the digital currency has a history of vertical rallies and sharp plunges. Hopefully, the traders would have protected their gains with a trailing stop loss.
The BCH/USD pair is currently taking support at the $1,200 levels. If this level holds, we should see a consolidation between $1,200 and $1,600. The next leg of the up move will commence after a break out above $1,600.
If the $1,200 level fails to stem the decline, the virtual currency can slide to the 20-day EMA at $1,000. Having closed out our position, we shall wait for a new buy setup to emerge before recommending fresh long positions.
Ripple attempted to resume its up move on April 24 but failed. Along with the other cryptocurrencies it has also given up ground today. Currently, it is trying to hold the trendline support. If the support holds, we should see another attempt to rally to $1.08 levels.
If the XRP/USD pair breaks below $0.78, it can slide to the 20-day EMA at $0.73. Below this, the next support is at the 50-day SMA.
Stellar attempted to break out and sustain above the $0.4 levels on three occasions but failed. It has turned down and broken below the immediate support of $0.36.
It has support at the 20-day EMA; below this point, it can go down to the 50-day SMA. There is also a possibility that the XLM/USD pair can become range bound between $0.184 and $0.4.
Therefore, if the traders have not booked profits on their remaining positions using a trailing stop, we suggest keeping the stop at breakeven.
We always recommend booking profits at regular intervals and using a trailing stop loss because cryptocurrencies turn down sharply and take away all the paper gains.
Litecoin is facing selling at higher levels. It broke out of the $160 levels on April 24 and triggered our buy levels proposed in the previous analysis. However, just a day after the breakout, it has plunged.
If the LTC/USD pair does not find support at the downtrend line, the moving averages, and the horizontal support at $141.026, it will become negative and can even slide to $115 levels.
Therefore, we recommend retaining the stop loss at $140.
If either of the above-mentioned support levels hold, we might see another attempt to break out of $160.
The consolidation in Cardano has resolved on the downside. It has turned down from the 0.000035 levels after failing to break out of it for eight days. It has broken below the critical level of 0.00003 and now has support at the 20-day EMA.
If the ADA/BTC pair bounces off the 20-day EMA, it will again attempt to break out of the overhead resistance. The next leg of the rally will start once the digital currency breaks out and sustains above the overhead resistance.
If the support at the 20-day EMA breaks, the digital currency can decline to the 50-day SMA and get into a range.
We hope most traders would have closed their positions using a trailing stop. If not, we suggest keeping the stops at breakeven.
NEO has not been performing according to our expectation. It continues to face stiff resistance at the $80 levels.
Though the NEO/USD pair broke out of the $80 levels on April 24, it could not sustain it. Prices are currently back below $80 once again. This shows a lack of buying and profit booking at higher levels.
We suggest retaining the stop loss on the remaining position at breakeven. If the digital currency bounces off the moving averages, it will again attempt to break out of $80. Our targets are $94 and $140.
EOS continued its bullish move and surpassed our target objective of $13. Though we expected it to face stiff resistance at $14, it touched an intraday high of $16.1460 levels on April 24.
We had suggested to trail the stops higher in our previous analysis. Hopefully, traders would have booked profits on their positions.
We anticipate strong resistance at the $16 levels. This is the same level from where the EOS/USD pair had returned in January. Therefore, we might see a few days of consolidation. A breakout above the January 13 intraday high of $18.67 will be a positive development and can extend the up move further.
We shall wait for a new setup to form before suggesting any new trade.