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The market data is provided by the HitBTC exchange.
Mt.Gox, the bankrupt Bitcoin exchange that collapsed in 2014, is soon expected to distribute $1 billion worth of cryptocurrencies to thousands of its creditors. As it has been a long wait, some might offload their bitcoins as soon as they receive them. Can this produce the next leg of the downward move?
When the trade volumes are high, even such a large supply can only result in a knee-jerk reaction, because the buyers lap up the excess supply. However, the picture changes when the volume is low.
If the bulls anticipate a large supply, they might hold off their purchases expecting to buy at lower levels. With a lack of buyers prices plunge, panic selling sets in and the bears keep the markets under pressure.
On the other hand, if the recipients hold on to their Bitcoin and sell in a measured manner, the markets can easily absorb small amounts of fresh supply without causing any disruption. It will be interesting to see how the markets respond.
What are the important levels below or above which the trend changes? Let’s check the charts and find out.
BTC/USD
The pullback from close to $6,075 stalled at the 20-day EMA, inviting fresh selling by the bears. Both negative formations – a head and shoulders and a descending triangle – will complete if Bitcoin breaks and closes below $5,900.
Though the pattern targets of such a breakdown are way lower, we anticipate support at $5,450 and $5,000.
If the bulls defend the $5,900–$6,075.04 support zone, the BTC/USD pair will again attempt to rebound higher. We shall turn positive if the price sustains above $6,600.
Currently, both moving averages are turning down and the RSI is also in a negative territory. This shows that a retest of the support lines is likely.
Considering the bearish patterns, we suggest traders wait for a successful retest of the supports and buy the subsequent pullback attempt. Until then, traders should watch the price action closely from the sidelines.
ETH/USD
The failure of the bulls to break out of the 20-day EMA for the past three days has invited selling. Ethereum has a minor support at $203, below which the slide can extend to $183.17.
The trend remains bearish, as both moving averages are sloping down and the RSI has turned from the 40 level.
The ETH/USD pair will indicate a change in trend if it sustains above the downtrend line of the descending channel and the 50-day SMA. A few days of range bound action is likely. We shall wait for a new buy setup to develop before suggesting a trade on it.
XRP/USD
Ripple has hardly moved up in the past four days. It continues to trade close to the support at $0.27. This shows that the buyers are in no hurry to get in at the current levels.
A break down of the $0.24508–$0.27 range will be a negative development that can lead to a further fall to $0.20.
If the bulls scale above the 20-day EMA, the XRP/USD pair can move up to the 50-day SMA and above that to $0.37390. We shall turn positive if the virtual currency sustains above the downtrend line, because that will signal a probable double bottom.
BCH/USD
The buyers seem to have deserted Bitcoin Cash, as price continues to struggle close to the year-to-date lows.
The down sloping moving averages and the RSI in the negative region shows that the bears still have the upper hand.
The BCH/USD pair will show signs of a turnaround if it breaks out of the descending channel. Until then, all pullback attempts will face a stiff resistance at the 20-day EMA and the 50-day SMA. We shall wait for the virtual currency to form a reliable buy setup before proposing any trade on it.
EOS/USD
EOS had been hovering close to the $5.65 mark for the past four days. As the bulls failed to break out of the overhead resistance, prices have turned down.
The prices can now slump to the next strong support at $4.493. If this support breaks, a fall to $4.1778 is probable.
If the support holds, the EOS/USD pair will attempt to break out of $5.65 and rally to $6.8299. Traders can hold the remaining long positions with stops at $4.4.
XLM/USD
For the past five days, Stellar has been trading inside the large range bar formed on September 11. If the bulls scale the $0.21489857 mark, a move to the top of the range is probable.
The trend will turn negative only if the bears sink and sustain the price below $0.184. The longer the XLM/USD pair consolidates in the range, the stronger will be the eventual breakout or breakdown.
We didn’t find any reliable buy setups inside the range; hence, we shall wait for the breakout of the range to sustain for three days and then suggest a long position on the pair.
LTC/USD
Litecoin has turned down from the 20-day EMA. The bears will now attempt to break the critical support at $49.466.
If successful, the LTC/USD pair will resume its downtrend and slide to the next support zone of $40–$44. On the other hand, if the support holds, a probable double bottom will complete if the bulls break out of $69.279.
The pattern target of such a move is $89. We shall wait for the price to break out of the range before proposing any trades on it.
ADA/USD
The bears have successfully defended the overhead resistance of $0.071355, resulting in a fall in prices. Cardano will resume its downtrend if the intraday low of September 12 breaks down. The next level to watch on the downside is $0.054541.
Both moving averages are sloping down and the RSI is close to the oversold territory, which shows that the sellers are in command.
If the support holds, the bulls will again attempt to break out of $0.071355. We anticipate the ADA/USD pair to spend some time forming a bottom. We shall wait for a reliable buy setup to form before suggesting a trade on it.
XMR/USD
Monero rose above $120 on September 15, but could not sustain the level. It remains the key resistance above which the pullback can pick up momentum.
On the way down, the 20-day EMA has been providing a strong support and the moving averages have completed a bullish crossover, which is a positive sign. If the bulls sustain above $120, a rally to $142.7 is probable. The long positions can be held with the stops at $95. We shall trail the stops higher after the XMR/USD pair scales above the $120 levels.
The digital currency has a strong support at the moving averages. A dip below the 50-day SMA will weaken the recovery and increase the probability of a fall to $96.39.
IOTA/USD
IOTA has turned down after the bulls failed to scale above the 20-day EMA for the past four days. Currently, the price is stuck in a tight range of about $0.5–$0.6170.
This tight range is unlikely to continue for long. The IOTA/USD pair will either break out or break down within the next few days. It is difficult to forecast, which way the move will happen.
A breakout of the downtrend line can result in a rally to $0.81 and further to $0.9150. Therefore, we suggest holding the long positions with the stops at $0.46. We shall trail the stops higher at the first available opportunity. If the bears push the prices lower, a drop to $0.45 and beyond that to $0.4 is probable.
The market data is provided by the HitBTC exchange. The charts for the analysis are provided by TradingView.
