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.
Larger players always have an unfair advantage over the retail traders as they have the money and the resources to manipulate prices. Many crypto investors have been complaining against the manipulation in the markets, which hurts small investors.
If the U.S. Department of Justice (DoJ) can identify and nail the culprits, it will immensely benefit the cryptocurrencies in the long-term. Many other traders also agree that these crackdowns will have positive influence on the markets.
A study by Weiss Ratings showcases that if the US Federal Reserve dilutes the “Volcker Rule” - which restricts the banks from indulging in risky assets to earn profits - Americans are likely to turn to cryptocurrencies.
Considering the flow of positive news in cryptos, we have been bullish for a while but are waiting for the opportune time to buy. Due to the highly volatile nature of digital currencies, we want to identify our risk before buying.
Let’s see if we get some low-risk buy setups today?
Bitcoin is sliding towards its lower target objective of $7,000. The attempt by the bulls to pull back on May 24 could not find buyers at higher levels, and prices have turned down once again. Currently, the digital currency is trying to hold the trendline support. If successful, a relief rally to $9,000 is probable.
If the trendline breaks, the next major support zone is between $6,075.04-$7,000, which will be strongly defended by the bulls. Due to the strong support just beneath the trendline, we are disregarding the formation of a symmetrical triangle.
Any sharp decline below $7,000 can offer the traders a good buying opportunity for the long-term. If purchased, the position should be protected with a stop below the February 06 lows of $6,075.04 because if this level breaks, we may see some panic selling.
Traders should avoid buying when the BTC/USD pair is plummeting. The purchase should be made when it shows signs of stabilizing in the 4-hourly chart.
We are suggesting a buy because we believe that the virtual currency will remain range bound between $6,075.04-$12,12172.43.
Ethereum fell to the 61.8 percent Fibonacci retracement levels of the recent rally on May 24. The bulls attempted a rebound from this level, but it fizzled out at the 50-day SMA. If the bears break below the intraday low of May 24, a decline to $464 will be on the cards.
If the bulls hold the supports, the ETH/USD pair can rally to the neckline of the head and shoulders pattern, which also coincides with the resistance line of the descending channel.
Aggressive traders can attempt this trade, but the risk-averse traders should wait until a new buy setup forms.
Ripple is taking support at the bottom of the range at $0.56. On May 24, it attempted to bounce off the supports but met with selling pressure at higher levels.
Currently, the XRP/USD pair is again retracing the previous day’s pullback. If the $0.56 level breaks down, a fall to $0.45 is likely.
If the support holds, aggressive traders can take a long position above $0.65 with a stop just below the recent lows. This is a very risky trade because the moving averages will offer a stiff resistance on any rally. Hence, the trade should be attempted only with about 30 percent of the usual position size.
A fall to the bottom of the range should be purchased when it shows signs of a rebound, hence, we believe that this trade can be attempted if the buy levels are reached.
Bitcoin Cash has completed a breakdown from a head and shoulders pattern that has a lower pattern target of $650. However, for the past two days, the bulls are trying to provide support at the $1,000 levels. If this level holds, the digital currency can pull back to the $1,200 levels, which is a major hurdle as both the moving averages are located close to this level.
If the BCH/USD pair breaks below $950, it should slide to $750, which is the next minor support. We suggest waiting for the decline to end and a new setup to form before initiating any long positions.
EOS is trying to rebound from the $10 levels but is facing stiff resistance at the top trendline of the descending channel and the 50-day SMA.
If the bulls succeed in breaking out of these overhead resistances, long positions can be initiated. Traders can wait for the price to scale above the moving averages and the recent swing high of $14.19 on May 20. Positions can be initiated above $14.25 with a suitable stop loss. The target objective of this trade is a rally to $18.67.
On the other hand, if the bears force a breakdown below $10, the EOS/USD pair can sink to $7.8 and below that to $5.961.
Long positions should not be attempted inside the channel.
Litecoin has formed a bearish descending triangle pattern, which will complete on a breakdown and close (UTC) below $107. This level has not been breached since December 09 of last year. Therefore, we consider this to be strong support.
On May 24, the bulls tried to pull back from the immediate support of $115 but could not break above the overhead resistance of $127.
Below $115 the LTC/USD pair will slip to $107. The first sign of strength will be when prices sustain above $127. Until then, it is best to take no action.
Cardano is looking weak because the pullback attempt from the $0.19 support level on May 24 did not sustain the higher levels. If this support level breaks, a fall to $0.13 is likely.
If the price slides to $0.13 and holds, it will confirm the formation of a large range, which can be traded by buying on a rebound from the lows and selling close to the upper end of the range.
A break above the descending channel will be the first sign of a probable change in trend. Currently, the ADA/USD pair is falling. We shall wait for prices to stabilize and turn around before proposing any buys.
For the past few days, we have been watching a probable head and shoulders top in Stellar. However, after the previous two days of price action and realigning the trendlines, we find a falling wedge pattern developing. This is a bullish setup that will complete on a break out of the upper resistance line. As traders, we should be quick to identify any new setup and change our opinion according to the charts.
Considering the overall negativity, we suggest waiting for the price to break out and close (UTC) above the 20-day EMA before buying. The minimum price target is $0.44, which is close to the overhead resistance of $0.47766719. Traders should keep a close stop loss, preferably below the recent lows because if the break out fails to find buyers at higher levels, the digital currency can slump to $0.184 levels.
If the XLM/USD pair moves contrary to our expectation and breaks down, instead of breaking out, traders should not initiate long positions. They should remain on the sidelines until a new buy setup forms.
The bulls are trying to hold the 50-day SMA on TRON while the bears are defending the 20-day EMA. The price has been stuck between these two moving averages for the past two days.
We believe that the zone between $0.0565 and the 50-day SMA will act as strong support. However, we want to see buying emerge at the critical support levels before recommending a long position because if the support zone breaks, the TRX/USD pair can plunge to $0.04 levels.
On the upside, the small downtrend line may act as a resistance. The digital currency might remain range-bound for a few more days before making a decisive move.