Only two of the top five performers have closed in the green in the past seven days, which shows that the sentiment is currently negative.
Tom Jessop, the president of Fidelity Digital Assets, said that the absence of a long track record is one of the main reasons that is keeping the institutional investors at bay from investing in cryptocurrencies.
As the asset class is only 10 years old, Jessop said that the institutions question the durability and longevity and are unsure whether it would be around tomorrow. However, he said that these concerns are likely to be resolved with time.
Even among the investors, the perception has been that crypto investing is largely male-dominated. Nonetheless, a survey by Bitcoin (BTC) fund operator Grayscale has found that 43% of the investors who showed interest in Bitcoin were women. Interestingly, 47% of women believe this is the right time to buy Bitcoin, compared to 39% of men who share the same opinion.
Crypto market data weekly view. Source: Coin360
Ross Ulbricht, the founder of the infamous darknet marketplace Silk Road, expects the price of Bitcoin to surge to $100,000 in 2020. Ulbricht did not use the day-to-day price movements of Bitcoin for the forecast but relied on the analysis of the investor emotions and investor psychology to arrive at the target price.
With the year coming to an end, many analysts are likely to forecast sky-high prices. However, we suggest traders watch the price action and make informed decisions instead of getting carried away with the predictions.
The total crypto market capitalization has been trading around $200 billion since Nov. 22. This shows that both the bulls and the bears are in a state of equilibrium. On the downside, if the market cap slips below $180 billion, it will signal advantage bears. Whereas, a break above $212 billion will tilt the advantage in favor of the bulls.
Let’s see what do the charts of the top-five performers of the past week project.
ATOM/USD
Cosmos (ATOM) is the best performer of the past week with a rise of about 15%. This is the third successive week that the altcoin has been among the top performers, which shows that the bulls continue to buy it even at higher levels.
The first major Cosmos upgrade since its launch in March of this year was completed on Dec. 11. This upgrade promises to bring important new features. After the recent runup, is it time to book profits or can the rally continue further? Let’s analyze the chart.
ATOM/USD weekly chart. Source: Tradingview
The ATOM/USD pair has reached the overhead resistance at $4.4389. This is the third attempt by the bulls to scale this level since July of this year.
We spot a bullish reversal cup and handle pattern that will complete on a breakout and close (UTC time) above $4.4389. The minimum target objective of this pattern is $6.9677. The traders can initiate long positions on a decisive close (UTC time) above $4.4389. As the overall sentiment is negative, a close stop-loss at $3.4 can be kept. We suggest traders take a smaller position, about 40% of the usual amount for this trade.
Contrary to our assumption, if the ATOM/USD pair turns down from $4.4389, a dip to $3 is possible. If this level holds, the pair might consolidate between $3 and $4.4389 for a few weeks. However, if $3 breaks down, a drop to $1.9101 is possible.
XTZ/USD
Tezos (XTZ) made it to the list of top ten coins by market capitalization during the week. Even in a dull week when most major cryptocurrencies are struggling to move up, it rallied about 10%, which is a positive sign.
Hardware wallet manufacturer Ledger has added support for Tezos staking on its Ledger Live application — which allows users to send or receive tokens via a smartphone or computer.
On Dec. 11, cryptocurrency exchange Kraken also launched support for Tezos staking. The users who stake their tokens would receive 6% annual returns, with rewards paid out twice a week. Can the momentum continue in the coming weeks? Let’s study its chart.
XTZ/USD weekly chart. Source: Tradingview
The XTZ/USD pair is facing resistance in the $1.6555 to $1.85 resistance zone. It has formed a doji candlestick pattern this week, which shows indecision among the bulls and bears about the next direction.
If the bulls fail to propel the price above the resistance zone, a drop to the 20-week EMA is possible. The bears have not been able to break below the 20-week EMA since early November. Hence, we expect a bounce from this level. If the bounce can carry the pair above $1.85, it will be a huge positive. The next levels to watch on the upside are $2.87 and then $3.37.
Conversely, if the bears sink the price below the 20-week EMA, a drop to $0.829651 is possible. This is critical support. Hence, we anticipate the bulls to mount a strong defense of this level. A bounce off this support can keep the pair range-bound between $0.829651 and $1.85 for a few weeks.
LINK/USD
Chainlink (LINK) declined about 1% in the past seven days but was still the third-best performer. Can it turnaround in the next week or will it continue to weaken further?
LINK/USD weekly chart. Source: Tradingview
The LINK/USD pair succumbed to profit-booking close to the $2.90 mark. Currently, the bulls are attempting to hold the price above the psychological support at $2. If this support cracks, a drop to $1.50 is likely.
We anticipate the bulls to defend the $1.50 level aggressively. If the pair bounces off this support, range-bound action between $1.50 and $2.90 is likely. This might give an opportunity to trade the range by keeping a small stop loss. The pair will turn negative on a break below $1.50
Conversely, if the price turns around from the current levels, the bulls will again attempt to push the price above $2.90. The best way to trade a range is to buy close to the support and sell close to the highs or wait for a breakout from it. We do not find any reliable buy setups at the current levels. Hence, we remain neutral on the pair.
BCH/USD
Bitcoin Cash (BCH) was the fourth-best performer, with a fall of about 3% in the past seven days. This shows that most major cryptocurrencies are in a bear market. Will the altcoin also succumb to selling pressure or does it show signs of a reversal? Let’s find out.
BCH/USD weekly chart. Source: Tradingview
The bulls have been attempting to defend the support at $192.52 for the past three weeks. However, they have failed to achieve a strong bounce off the support, which shows a lack of buying interest at higher levels.
Currently, the price is stuck in a tight range of $192.52 to $227.01. A breakdown of the support will be a huge negative as it might resume the downtrend with the next support at $166.25. The bearish crossover on the moving averages and the RSI in the negative zone indicates that bears have the upper hand.
However, if the BCH/USD pair rebounds off the support at $192.52 and rises above $227.01, it is likely to attract buyers. Above $227.01, a rise to $306.78 is possible. Therefore, traders can attempt this trade after the price closes (UTC time) above $227.01. It is better to wait for the price to turn around and show strength before buying, instead of trying to time a bottom.
NEO/USD
With a decline of just over 3%, NEO (NEO) rounded up the list of the top five performers. Can NEO hold on to its place among the top-20 coins by market cap?
NEO/USD weekly chart. Source: Tradingview
The failure to break out of the overhead resistance at $13.88772 attracted profit booking that dragged the price below the moving averages. If the bulls do not push the price back above the moving averages, the NEO/USD pair is likely to gradually dip to the support at $5.58.
We expect the bulls to defend the $5.58 support zone aggressively. Hence, a bounce off it could offer a low-risk buying opportunity The first target on the upside would be $13.88772, followed by $20.96333.
However, if the bears sink the price below $5.58, it will be a huge negative as the downtrend will resume. We do not find any buy setups at the current levels. Hence, we suggest traders remain on the sidelines until an attractive buy setup emerges.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. 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.
