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Just a few days back we were discussing whether cryptocurrencies have entered a bull phase. Now, after the recent slump in prices, analysts are predicting a huge fall on Bitcoin (BTC).
Bloomberg Intelligence analyst Mike McGlone believes that Bitcoin will plunge to last year’s average level of $4,000.
Jeff deGraaf, head of technical research at Renaissance Macro Research has a more dire warning for the Bitcoin bulls. He said that “once the top is complete”, it may even mean “game-over” for Bitcoin. DeGraff is a highly respected voice in the technical analyst community, hence, his forecast should be kept in mind.
However, it is important to note that technical analysts can quickly change their opinion according to the chart patterns. While it is beneficial to know their views, the trades should only be taken based on the current chart patterns. Additionally, every position should be protected by a stop loss to protect the capital, should the markets go opposite to our expectation.
The bulls have defended the critical support level at $6,075.04 for the past two days. Although this is a positive sign, a sharper pullback would have given us greater confidence that the bulls are aggressively buying at these levels. As the recovery has been weak, we will have to rely on other signs to predict the next probable direction on Bitcoin.
The moving averages are on the verge of completing a bearish crossover, which is a negative sign. On the other hand, the RSI is close to the oversold territory, which shows the selling has been overdone and a pullback is likely.
Any pullback will face a stiff resistance at the downtrend line of the descending triangle and then at the moving averages. The virtual currency will show the first signs of bullishness once it sustains above $7,200.
There is a possibility for the BTC/USD pair to remain range bound between $6,000 and $8,500. We have come to this conclusion because the bottom — around $6,000 — and the top — around $8,500 — have held twice since May of this year. Therefore, aggressive traders can enter long positions at $6,800 with the stops below $5,900 and expect a rally to $8,500. This is a risky trade because we are jumping the gun, so we suggest using only 30 percent of the usual allocation. Positions can be added after the price sustains above $7,200.
Our view of the formation of a range will be invalidated if the bears sink prices below $5,900. Under such circumstances, the downtrend can extend to the next support levels at $5,400 and $5,000.
Ethereum is struggling to bounce off the critical support at $358. On August 8, the fall to $346.35 was the lowest level since November 19 of last year. The pullback on August 9 was unimpressive as the price retreated from $370.39.
If the bears push the prices below $346, the fall can extend to $280. Though the RSI is already in oversold territory, we are not confident about a bounce yet because during the previous fall in late March of this year, the RSI had become deeply oversold before a recovery happened.
We shall turn positive on the ETH/USD pair once it sustains above the 50-day SMA. Until then, we suggest traders remain on the sidelines.
Ripple fell to $0.32 on August 8, just below our proposed target of $0.32862. If this level also breaks, the next stop is at $0.24001.
Though the RSI is in a deeply oversold territory, the weak attempt to pull back on August 9 shows that the buyers are in no hurry to buy the cryptocurrency.
We shall wait for the XRP/USD pair to form a bullish pattern before turning positive on it. The first sign of strength will be when the price sustains above the 50-day SMA.
See more at: https://cointelegraph.com/news/bitcoin-ethereum-ripple-bitcoin-cash-eos-litecoin-cardano-stellar-iota-tron-price-analysis-august-10