In previous analysis we had suggested that the current fall was looking like a bear trap. Now that a turnaround has occurred we must take a closer look in order to see if it is a good time to start buying? Let’s analyze the charts.
Though the initial interest in Bakkt futures was not very encouraging, the platform continues to add new features for institutional traders. On Oct. 24 Bakkt announced the launch of regulated options contract for Bitcon futures starting on Dec. 9. With these tools at their disposal, institutional investors are likely to show greater interest once the market starts a trending move. The recent spurt in volume on Bakkt is also a sign that institutional interest is gradually picking up.
The total market capitalization has bounced from very close to the $200 billion support, which is a positive sign. The pullback from the dip on Oct. 23 has been broad-based with Bitcoin and several altcoins doing well. This shows that the crypto space is generating interest among buyers.
Many major cryptocurrencies are showing signs of selling exhaustion. When the bulls buy breakdowns from critical support levels, instead of panicking, it shows that the sentiment is changing. As the recovery is across the board, it increases the sustainability of the move. Recently, Joel Birch, the founder of crypto hedge fund and market research firm Lunar, said that traders should view a drop below $8,000 as a buying opportunity.
The failure of the bears to capitalize on the breakdown of $7,702.87 on Oct. 23 has attracted buyers. A failed breakdown of a critical level, followed by a quick reversal is usually a sign that the bears are losing their grip and a bottom is around the corner.
As the BTC/USD pair climbed above the previous support turned resistance of $7,702.87, it picked up momentum that resulted in a sharp rally. The pace of the rise from the lows shows aggressive buying by the bulls and short covering by the bears.
The up move has broken out of the 20-day EMA, which is a positive sign. The next target to watch on the upside is the 50-day SMA. If this level is crossed, a rally to the downtrend line, close to $10,000, is likely. This is an important level to watch out for because if the bulls scale above the downtrend line, the uptrend will resume. As the sentiment has turned bullish, traders can use dips to $8,200 to buy. A stop loss can be kept at $7,200. Our bullish view will be invalidated if the bears defend the overhead resistance zone and sink the price below the recent lows of $7,297.21.
Though Ether (ETH) broke below the initial support at $161.056, the bears could not break below the Sept. 24 low of $151.829. This shows that lower levels are attracting buyers, instead of resulting in a panic.
Repeated failures of the bears to break below $151.829 resulted in a sharp pullback. The up move has reached the downtrend line, which is likely to act as a stiff resistance. If this level is crossed, the relief rally can reach $196.483.
Above this, the ETH/USD pair can rise to $235.70. Therefore, traders can buy on a breakout and close above the 50-day SMA with a stop loss of $150. The bullish divergence on the RSI also points to a rally. Our bullish view will be invalidated if the pair turns down from the downtrend line and plummets below $150.
The bulls purchased the sharp dip to $0.24715 on Oct. 23. This shows that the sentiment is to buy the dips rather than panic and sell positions, which is a positive sign. If the buyers can push XRP above $0.29227 to $0.30368 resistance zone, a move to $0.34229 will be on the cards. Therefore, traders can continue to hold their long positions with the stop loss at $0.24.
If the bulls fail to push the price above the overhead resistance zone, the XRP/USD pair might remain range-bound for a few more days.
Our positive view will be negated if the bears sink the pair below the $0.24508 to $0.22 support zone. If this zone breaks down, the downtrend will resume. However, we give it a low probability of occurring.
Bitcoin Cash (BCH) dipped below the critical support of $203.36 on Oct. 23 but the bears could not capitalize on it because, by close (UTC time), the price had risen back above $203.36. This showed a lack of sellers at lower levels. Failure to follow through on a breakdown, after a bearish pattern is a bullish sign.
The bulls have pushed the price above the top of the range at $241.85 and are currently attempting to scale above the 50-day SMA. If successful, the rally can extend to the neckline of the head and shoulders pattern, which might act as a resistance. However, if this level is crossed, a move to $360 is likely.
We do not suggest chasing prices higher. Traders can wait for the BCH/USD pair to dip towards $242 before buying. The stop loss can be kept at $196.
Litecoin (LTC) has bounced sharply from the lows of Oct. 23. The bulls are attempting to break above the downtrend line, which is a stiff resistance. Above this level, the next resistance is likely to be the 50-day SMA. If the price turns down from this zone, it will extend its stay inside $47.1851 to $59.9743 range.
However, if the bulls can push the price above the overhead resistance zone, a rally to $80.2731 is likely. Therefore, traders can buy above $63 and keep a stop loss at $47. Our view will be invalidated if the LTC/USD pair reverses direction from the current levels and plummets below the recent lows of $47.1851.
The bulls defended the support at $2.4001 on Oct. 23, which is a positive sign. The sharp pullback in EOS is likely to face resistance at $3.370. If the bulls fail to scale above this level, a few days of consolidation between $2.4001 and $3.370 is possible. A consolidation, if followed by a breakout, signals accumulation by strong hands at lower levels. Longer the consolidation, stronger will be the eventual breakout from it.
A breakout of $3.370 can carry the price to $4.240 and above it to $4.8719. Therefore, traders can buy on a breakout and close (UTC time) above $3.370 and keep an initial stop loss of $2.40.
Our view will be invalidated if the EOS/USD pair turns down from one of the overhead resistance levels and plunges below $2.4001.
Binance Coin (BNB) again took support closer to $18.30. This is the second time the bulls have held this level in the past fortnight, which shows that buyers are using the dips to accumulate.
If the bulls can now propel the BNB/USD pair above the channel, it will signal the end of the downtrend. Therefore, we retain the buy recommendation given in an earlier analysis. Our bullish view will be invalidated if the bulls fail to sustain above the channel. A break below $14.2555 will be a huge negative.
Bitcoin SV (BSV) found support at the 20-day EMA on Oct. 23, which is a positive sign. The subsequent bounce has been strong and it picked up momentum after breaking out of the overhead resistance zone at $107 to $115.170.
With the 20-day EMA sloping up gradually and the RSI in the positive territory, the advantage is with the bulls. There is a minor resistance at $138.95 and above it $160.
Instead of chasing prices higher, we suggest traders wait for a dip before buying. Our bullish view will be negated if the BSV/USD reverses direction from the current levels and dives below the support at $90.40.
Stellar (XLM) is trying to form a higher floor at $0.056. The bulls purchased the dip to this level on Oct. 23, which is a positive sign. If the buyers can push the price above the downtrend line, a rally to $0.088708 is possible.
Conversely, if the XLM/USD pair fails to scale above the downtrend line, it will remain range-bound for a few more days.
A break below the immediate support at $0.056 can drag the price to the critical support at $0.051014. If this level also cracks, the downtrend will resume. Therefore, traders can retain the stop loss on the long position at $0.051.
Tron (TRX) bounced off the immediate support at $0.0136940 on Oct. 23. It has broken out of the moving averages and is attempting to scale above the downtrend line. Both moving averages are flat and the RSI is close to the center, which indicates a balance between the bulls and the bears.
If the bulls can push the price above the downtrend line, a move to $0.018660 is likely. We anticipate the bears to offer a strong defense at this level. If the TRX/USD pair turns down from this level, it will extend its stay inside the range.
A break below $0.0116262 to $0.011240 support zone will resume the downtrend. We will wait for a buy setup to form before proposing a trade in it.