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Market data is provided by the HitBTC exchange.
Tom Lee, managing partner and head of research at Fundstrat Global Advisors, believes that Bitcoin is in a bull market and it is likely to make a new high in 2020. Lee has based his views on a few signs that, according to him, point to the end of the bear market. Some of the important signs that Lee pointed out are the increase in trading volume buoyed by investors in Venezuela and Turkey, the breakout of Bitcoin above the 200-day moving average, and an increase in the number of OTC clients and the trading per client.
The fundamentals of altcoins are improving as well. Large organizations are exploring ways to use the blockchain technology to improve their services and productivity. The latest to opt for the technology is United Kingdom car manufacturer Jaguar Land Rover, which will reward its drivers IOTA tokens for providing information on road conditions, traffic congestion and vehicle performance. Drivers can purportedly redeem their tokens for coffee or to pay road tolls.
While the fundamentals are improving, the price might take some time to catch up. This has resulted in a few long-term crypto bulls facing huge losses during the bear phase. Hence, the traders must keep an eye on the price action before jumping in. Let’s consult the charts and see if we spot any buy setups in major cryptocurrencies.
Bitcoin (BTC) is finding it difficult to stay above the 20-day EMA. This is a negative sign as it indicates a lack of buying at these levels. If this support breaks down, the digital currency can drop to the next critical support of $4,914.11. We expect a strong support at this level, but if this also crumbles, the next support is at the 50-day SMA.
For now, both the moving averages are trending up, which suggests that the bulls are still in the game. If the BTC/USD pair rebounds off the 20-day EMA or from the lower level of $4,914.11, it will again try to resume its up move to $5,600 and above it to $5,900. Traders can retain the stop loss of $4,800 on the remaining long positions. The next few days are very critical as it will set the stage for the next leg of the trending move.
Ethereum (ETH) has been trading between the moving averages for the past three days. The 20-day EMA is flat and the RSI is just below the midpoint. This points to a consolidation in the short term. If the price remains close to $167.20, it will increase the possibility of a breakout from it.
The ETH/USD pair is likely to gain strength above the downtrend line and pick up momentum after crossing $190.54. The upside targets to keep in mind are $225 and above it $256.
Our bullish view will be invalidated if the bears sink the pair below the 50-day SMA. If that happens, a drop to the trendline of the ascending triangle is probable. We will wait for the digital currency to show strength before suggesting a long position in it once again.
The bounce from the critical low of $0.27795 was tepid. It shows a lack of urgency among the buyers to own Ripple (XRP) even at these low levels. We now expect the bears to attempt a breakdown of the support once again. If successful, it can slide to the yearly low of $0.24508. Any break of this level will be a major sentiment spoiler.
Contrary to our assumption, if the XRP/USD pair rebounds from the current levels, it will point to a range bound action between $0.27795 and $0.33108 for a few days. The pair will show signs of strength if it breaks out of $0.33108 and will pick up momentum above $0.38. As it has been a huge underperformer for the past few months, we will wait for it to signal a turnaround before suggesting a trade in it.
After holding the support at $255 for three days, Bitcoin Cash (BCH) broke below it on April 28. Its next support is the zone between $241.97 and the 50-day SMA. Any break of this zone will pull it lower to $209 and below it to $166.98, which will complete a 100% retracement of the recent rally.
The 20-day EMA is turning down and the RSI is in the negative territory. This suggests that the bears have the upper hand in the short term.
If the BCH/USD pair rebounds from the 50-day SMA, it can re-enter the range between $335.62 and $255. This will increase the probability of a consolidation for the next few days. We will wait for the pair to show strength before recommending a trade in it.
Litecoin (LTC) has broken down of the 50-day SMA, which is a bearish sign. It can now drop to the next support at $62.450, below which it will weaken. The moving averages are on the verge of a bearish crossover and the RSI is deep in the negative territory, which shows that the bears are in command.
Our bearish view will be invalidated if the LTC/USD pair reverses direction and breaks out of the 20-day EMA. That will be the first sign that the pair is finding buyers. It can then move up to $84.3439 and above it to $91. We will wait for the price to break out of $91 before turning positive on it.
EOS has been trading between both the moving averages for the past five days. The failure to scale above the 20-day EMA has attracted sellers and the price is currently back at the 50-day SMA.
If the bears sink the EOS/USD pair below the uptrend line of the wedge, it will complete a bearish pattern that has a target objective of $2.80. The 20-day EMA is sloping down and the RSI is in the negative zone. This shows that the bears have the upper hand.
Our bearish view will be invalidated if the price rebounds off the current support at the 50-day SMA or the uptrend line and rises above the downtrend line. In such a case, a rally to $5.6163 and above it $6.0726 is probable. We will wait for the cryptocurrency to resume its up move before proposing a trade in it.
Binance Coin (BNB) continues to be in an uptrend. Both the moving averages are sloping up and the RSI is in the positive territory. This suggests that the bulls are still at an advantage. However, if the cryptocurrency plummets below the 20-day EMA, it can drop to the uptrend line. The 50-day SMA is just below this level. Hence, we anticipate a strong support in this zone.
A breakdown of the wedge will complete a bearish pattern that can drag prices to $14. However, if the bulls defend the 20-day EMA, the BNB/USD pair will try to resume the uptrend. Currently, we do not find any reliable buy setups on the pair. Hence, we shall not suggest a trade in it.
The bulls are struggling to hold the uptrend line. If the bears sustain the price below the uptrend line, Stellar (XLM) will complete the breakdown of the rising wedge that can drag the price to $0.08 and lower. The moving averages have completed a bearish crossover, which is also a negative sign.
The XLM/USD pair will show a sign of strength if the bulls manage to push it above the moving averages and $0.12039489. Until then, every minor pullback will be sold into. We suggest traders avoid bottom fishing and wait for the price to stabilize and signal a trend reversal before jumping in.
Cardano (ADA) has broken down of the 50-day SMA after staying above it for the past three days. This is a negative sign. It shows a lack of buyers at higher levels. The developing bearish crossover of the moving averages indicates that the path of least resistance is to the downside.
The ADA/USD pair can now fall to $0.0632230, which is a critical support. If this gives way, the pair can will become extremely negative and dive to $0.050 and below it to $0.040. On the contrary, if the bulls defend $0.0632230, the digital currency will again try to break out of the moving averages. We will wait for a new buy setup to form before suggesting a trade in it.
After the bounce from $0.02094452, Tron (TRX) has been facing resistance close to the moving averages. The price has turned down and can now drop to $0.02094452 once again. A break of this level will drag the price down to the major support of $0.01830.
If the TRX/USD pair rebounds off the supports, it can remain range bound for a few more days. The pair will signal a likely change in trend if it scales above the top of the range at $0.02815521. Currently, the digital currency is stuck in a range where the price action can be volatile. Therefore, we shall wait for it to breakout of $0.03278079 before recommending a long position in it.
Market data is provided by the HitBTC exchange. Charts for analysis are provided by TradingView.