Latest technical analysis on top 9 cryptocurrencies from an expert trader.
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.
After listing Bitcoin futures in December of last year, CME launched two indexes tracking Ethereum on Monday. Though the company has denied plans of adding another new product, speculation is rife that Ethereum futures may be added in the future.
Ethereum futures will offer the institutional players an opportunity to diversify their trading into the top two cryptocurrencies by market capitalization.
Software developer Kx Systems has also launched cryptocurrency trading on its while label forex trading platform. The software supplier serves a few investment banks and hedge funds. Nasdaq is also not to be left behind. It is providing the technology to the new centralized crypto exchange, DX, which will offer trading in the market’s top six cryptocurrencies.
The stage is being set for the institutional players to take the plunge. So, should the retail investors buy and hodl? We believe that the large players might first push prices down, accumulate at lower levels and then boost prices. Hence, retail investors should stagger their purchases instead of buying all at once.
Let’s see if we find any buy setups on the charts.
For the past three days, Bitcoin has been taking support at the 50-day SMA. The bulls will strongly defend the support zone between $7,900 to $8,400 because if this cracks, a fall to $7,000 will be on the cards.
If the support zone holds, the cryptocurrency will stay range bound between $7,900-$10,000.
The 50-day SMA has been flat for the past few days while the 20-day EMA has become flat in the past week. This shows that the BTC/USD pair will soon enter a period of consolidation.
The resistance of the range is well established at $10,000, but the supports are still unclear. It will either be $7,900 or $6,700.
Hence, we suggest waiting for a couple of days before clarity emerges.
The dip in Ethereum below the 20-day EMA was aggressively purchased on May 14, resulting in a move back to the overhead resistance of $745.
Currently, the ETH/USD pair is looking strong as it is holding above the $700 levels. This increases the possibility of a break out of $745 levels once again.
Aggressive traders can take a very short-term long position above $750 with a close stop loss. The target is $838, but this is a very risky trade, hence, should be attempted with only about 30 percent of the usual position size.
On the downside, the critical support levels are $637, $600 and the 50-day SMA at $570.
Bitcoin Cash bounced back sharply from the lows on May 12, but it is struggling to sustain above the 20-day EMA and break out of the small downtrend line.
The BCH/USD pair may form a very short-term head and shoulders pattern, which will complete on a breakdown and close below $1,270 levels. This bearish pattern has a target of $650, but it is unlikely to be a straight fall because the digital currency has strong support at $1,221, then at the 50-day SMA at $1,100 and finally at $800.
If the neckline of the H&S pattern doesn’t break down and prices break above $1,520 levels, Bitcoin Cash can rally back to $1,800 levels. Traders should wait for prices to break and close (UTC) above the downtrend line before buying.
Ripple broke below the 50-day SMA on May 11 but found strong buying support at $0.632 levels on May 12. Currently, it has climbed back above the 50-day SMA.
On the upside, it will face a strong resistance at $0.76, which was previously the support of the range. The 20-day EMA is just above this level, which will also act as a resistance.
If both these levels are crossed, the XRP/USD pair will become positive, and the probability of a rally to $0.9377 levels increase.
If the bulls fail to scale above the overhead resistance, the cryptocurrency can slide to $0.56-$0.58 levels.
Stellar bounced off the 50-day SMA on May 12, but the pullback is facing resistance at the 20-day EMA. If the bulls break above the 20-day EMA, a rally to $0.45 levels is possible.
If the XLM/USD pair turns down from the moving average but takes support at the $0.334 levels, it will be a positive sign and we can expect a break out of the 20-day EMA within a couple of days.
However, a break below the 50-day SMA will increase the possibility of a head and shoulders pattern, which can sink the digital currency to the $0.20 levels. Therefore, traders should wait for buying to emerge before establishing long positions.
Litecoin broke below the 50-day SMA and the horizontal support on May 11 but quickly rebounded from the lows on May 12. Currently, the bulls are trying to sustain above the $141 levels, which is a positive sign.
Any up move in the LTC/USD pair will face resistance between $167 and $173 levels. The 50-day SMA has still not turned up and the 20-day EMA is also turning down. Hence, we don’t anticipate a break out above the downtrend line.
On the downside, a break below the $132.163 level opens up a downside target of $115. As we don’t find any buy setups, we are not recommending any trade on it.
Cardano plunged below our second stop loss on May 12 but took support at the 50-day SMA and the trendline. The ensuing up move is facing resistance close to the 20-day EMA. Currently, prices are again sliding towards the trendline support.
If the ADA/BTC pair breaks the trendline support, it can decline to 0.000025 levels, which is a strong support. On the other hand, if the trendline holds, Cardano will again try to scale above the 0.00003445 levels.
There are no reliable buy setups, hence, we are not proposing any trade on it.
IOTA is currently sandwiched between the 20-day EMA and the 50-day SMA. The bulls are defending the horizontal support at $1.63 while the bears are defending the 20-day EMA.
If the IOTA/USD pair climbs above the 20-day EMA and the overhead resistance at $2.2117, it will become positive.
Though there is a minor resistance at $2.6977, we believe that it will be crossed if the digital currency closes (UTC) above $2.2117.
We should wait for the breakout before suggesting any long position.
On May 12, EOS bounced off the 61.8 percent Fibonacci retracement and the bottom trendline of the descending channel. For the past three days, it has been facing resistance at the $15.1390 levels.
On the upside, the EOS/USD pair will face resistance at the 20-day EMA and the top trendline of the descending channel. A breakout and close (UTC) of the channel will be a bullish sign and can be purchased by keeping a stop loss below the May 12 lows.
If the price fails to rally above the overhead resistance it can again decline to the 50-day SMA. A sustained move below $12.4810 will weaken the digital currency.