Many cryptocurrencies are showing strength by hovering close to their recent highs even as gold is selling off.
The U.S. equity markets are on a tear as the traders cheer the largest jobs gain ever. This report has improved sentiment as it suggests that the blip in the economy due to the pandemic was temporary.
Many traders who had been sitting on the sidelines are likely to jump into stocks due to fear of missing out on what could be the early stages of a strong rally. This shift into stocks has resulted in a drop in gold price, which is considered as a safe haven against market volatility.
However, it is important to note that the crypto markets were not impacted as negatively and are holding up quite well. This shows that traders are not shifting out of cryptocurrencies as they expect prices to rise further. After the euphoria in the stock markets reduces, traders are likely to shift their focus back to cryptocurrencies.
Daily cryptocurrency market performance. Source: Coin360
While the short-term looks uncertain, a report by Bloomberg states that Bitcoin (BTC) will retest it's all-time high and might even reach a new high of $28,000 this year. The report points to the pick up in demand from the institutional investors as indicated by the rise in the assets under management at Grayscale Bitcoin Trust.
The top-ranked cryptocurrency on CoinMarketCap is close to a critical resistance. Will it breakout or turn down from here? Let’s study the charts to find out the path of least resistance.
Bitcoin (BTC) has been trading between the resistance line of the symmetrical triangle and the 20-day exponential moving average ($9,441) for the past two days. This suggests a tussle between the bulls and the bears for supremacy.
BTC/USD daily chart. Source: Tradingview
A breakout of the triangle will be the first indication that bulls have overpowered the bears. Above the triangle, a rally to $10,500 is likely. This level would be the acid test for bulls because if $10,500 is scaled, the next leg of the uptrend is likely to begin.
Conversely, if the BTC/USD pair turns down from the current levels and drops below the 20-day EMA, a decline to the support line of the triangle is possible. The 50-day simple moving average ($8,322) is just below the triangle, hence, the bulls are likely to aggressively defend this support zone.
Nevertheless, if the pair slips below the 50-day SMA, a drop to $8,130.58 and below it to $6,752 is likely.
For the past two days, Ether (ETH) has been stuck inside the large intraday range formed on June 2. If the bulls can propel the price above $253.556, the biggest altcoin could rally to the resistance of the ascending channel at $270.
ETH/USD daily chart. Source: Tradingview
The upsloping moving averages and the RSI above 60 indicates that bulls have the upper hand. However, if the second-ranked cryptocurrency on CoinMarketCap turns around from the current levels and plummets below the 20-day EMA ($224) the bullish momentum will weaken.
The bears will gain the upper hand after the ETH/USD pair dips below the 20-day SMA. Below this level a drop to the 50-day SMA (205) and then to $176.112 is possible.
XRP has been trading close to the moving averages for the past two days. The failure of the bulls to achieve a strong rebound off this support indicates a lack of demand at these levels.
XRP/USD daily chart. Source: Tradingview
If the bears sink the third-ranked cryptocurrency on CoinMarketCap below the moving averages, a drop to $0.19 and then to $0.17372 is possible. A breakdown below this support will complete a bearish descending triangle pattern, which will be a huge negative.
On the other hand, if the XRP/USD pair picks up momentum and breaks out of the downtrend line, the bulls will attempt to carry the price to the $0.23612–$0.24770 resistance zone.
The bears are likely to defend this zone aggressively, therefore, traders can book profits when the price nears it. Currently, the stops can be retained at $0.19 but can be trailed higher after the pair sustains above the downtrend line.
The bulls have once again pushed the price of Bitcoin Cash (BCH) above the overhead resistance of $255.46. If the bulls can sustain this level, the altcoin is likely to rise to the critical resistance of $280.47.
BCH/USD daily chart. Source: Tradingview
A breakout of $280.47 could start a new uptrend that can carry the fifth-ranked cryptocurrency on CoinMarketCap to $350. The traders can buy on a close (UTC time) above $280.47 with a stop below $235.
However, if the BCH/USD pair turns down from the current levels and slides below the moving averages, a drop to $217.55 and then to $200 is likely. The next leg of the down move could start if $200 gives way.
Bitcoin SV (BSV) has been clinging to the moving averages for the past two days. This suggests that neither the bulls nor the bears are showing any interest in trading the altcoin at the current levels.
BSV/USD daily chart. Source: Tradingview
As the trading range has been in place for more than two months, a strong momentum is needed to start the next trending move.
Traders can keep an eye on the $227 level as a close (UTC time) above it will signal the possible start of a new uptrend. Such a breakout can offer a buying opportunity to the traders with a target objective of $326.80.
On the other hand, if the sixth-ranked cryptocurrency on CoinMarketCap plummets below $170, a new downtrend is likely to begin.
Although Litecoin (LTC) has bounced off the moving averages, the bulls are struggling to reach the resistance of the range at $50.7864–$52.2803. This suggests a lack of conviction among the buyers.
LTC/USD daily chart. Source: Tradingview
Without a pickup in momentum, the bulls will find it difficult to scale above the overhead resistance. This indicates that the seventh-ranked cryptocurrency on CoinMarketCap could extend its stay inside the range for a few more days.
The bullish scenario would come into play if the LTC/USD pair breaks out and closes (UTC time) above $52.2803. Such a move can offer a buying opportunity to the traders as suggested in the previous analysis.
Conversely, the trend will turn in favor of the bears on a break below the support of the range at $39.
Binance Coin (BNB) continues to trade between the 20-day EMA ($17) and the overhead resistance of $18.1377 for the past few days. This is a positive sign as it shows that the bulls are not allowing the price to slip below the 20-day EMA.
BNB/USD daily chart. Source: Tradingview
A breakout and close (UTC time) above $18.1377 is likely to start the next leg of the recovery that can carry the eighth-ranked crypto-asset on CoinMarketCap to $21.50. Therefore, traders can buy on a close (UTC time) above $18.1377.
This bullish view will be negated if the bears sink the BNB/USD pair below the moving averages. Below this support, a drop to $15.80 and then to $13.65 is possible.
After two days of tepid trading action, EOS is showing promise today. The altcoin has reached the overhead resistance at $2.8319. If the bulls can push the price above this resistance, a rally to $3.1104 is likely.
EOS/USD daily chart. Source: Tradingview
The ninth-ranked cryptocurrency on CoinMarketCap is likely to pick up momentum on a break above $3.1104. A close (UTC time) above this resistance can offer a buying opportunity to the traders. The target objective to watch out for is $3.8811.
This bullish scenario will be invalidated if the EOS/USD pair turns down from the current levels and breaks below the moving averages. Below this support, a drop to $2.3314 is likely.
Cardano (ADA) is in a strong uptrend. The altcoin resumed its up move on June 4 after it broke above the immediate resistance of $0.0865169. The next target objective is a rally to the $0.1–$0.10652 overhead resistance zone.
ADA/USD daily chart. Source: Tradingview
Although the trend is up, the relative strength index is in the overbought zone. This suggests that the 10th-ranked cryptocurrency on CoinMarketCap could correct for one to three days. This dip can offer a buying opportunity to the traders.
On the upside, $0.1–$0.10652 is likely to be a tough hurdle to cross, hence, profits can be booked in this zone.
This bullish momentum will be invalidated if the bears drag the ADA/USD pair to $0.072. Such a sharp pullback will indicate profit-booking by traders.
The bulls nudged Tezos (XTZ) above $3.074 on June 4 but they could not hold on to the higher levels. This suggests that bears are aggressively defending this resistance.
XTZ/USD daily chart. Source: Tradingview
If the bears sink the 11th-ranked cryptocurrency on CoinMarketCap below the 20-day EMA ($2.83), a drop to the 50-day SMA ($2.68) is possible. The trend is likely to turn in favor of the bears on a break below $2.24.
Conversely, if the XTZ/USD pair turns around from the current levels or bounces off the uptrend line, the bulls will make another attempt to carry the price above $3.073–$3.1384 resistance zone.
If successful, the pair is likely to start its journey towards its target objective of $3.3367 and then $3.80. Traders can trail the stop-loss on the long positions below the 50-day SMA.
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.