Price Analysis Jan 01: BTC, ETH, XRP, BCH, LTC, EOS, BNB, BSV, XTZ, XLM
2020 has started on a subdued note but traders are anticipating an increase in activity that could lead to a strong directional move in the next few days.
2019 was an eventful year for Bitcoin. In the first six months, it rallied about 310%, from a low of $3,355 on Jan. 29 to a high of $13,973.50 on Jun. 26. That stoked expectations that the leading digital currency might retest its lifetime highs at $19,531.90. However, the second half of the year was a disappointment as the price continued to decline and lost over 50% from its top at $13,973.50.
As cryptocurrencies are a new asset class, they are difficult to analyze using traditional tools. Therefore, analysts have been issuing wide-ranging predictions on it. While Bitcoin enthusiasts expect the price to blow through the roof, the naysayers keep writing its obituary.
However, the reality is, the performance has been somewhere in between success and failure. Therefore, we suggest traders not to get carried away by very high or very low targets and take their investing one step at a time.
Daily cryptocurrency market performance. Source: Coin360
As the fundamentals of the sector continue to improve with each passing year, we expect the price-performance to catch up eventually. While it is difficult to predict the year-end targets, we expect Bitcoin and several altcoins to give enough opportunities to earn handsome profits during the year.
At the start of the new year, do we find any buying opportunities? Let’s analyze the charts.
The 20-day EMA has flattened out and the RSI is close to the midpoint. This suggests a balance between buyers and sellers. Bitcoin (BTC) is likely to remain range-bound for a few more days. If the range is between $7,856.76 and $7,000, it will signal strength and increase the possibility of a break above the range.
BTC USD daily chart. Source: Tradingview
A breakout of $7,856.76 will be a bullish sign as it would push the price above the falling wedge pattern that has been in place for the past six months. The first target is a move to $10,360.89. If this level is scaled, the next level to watch out for is $12,000.
Conversely, if the BTC/USD pair fails to stay above $7,000, a drop to $6,435 will be on the cards. We expect the bulls to defend this support aggressively. If successful, a large range between $6,435 to $7,856.76 might come into play.
We believe a breakout of $7,856.76 offers a buying opportunity with a good risk to reward ratio. Hence, traders can initiate long positions as suggested in our earlier analysis. The pair will turn negative on a break below $6,435.
The bulls are attempting to keep Ether (ETH) above $131.84. We spot a symmetrical triangle formation that has developed near the recent lows. Usually, the symmetrical triangle works as a continuation pattern but sometimes, it acts as a reversal pattern.
ETH USD daily chart. Source: Tradingview
It is difficult to predict the direction of the breakout. Hence, traders should wait for the price to either breakout or breakdown of the triangle before taking a directional bet.
If the ETH/USD pair breaks out of the triangle, it will be a positive sign. The first target objective of such a move is $164. We suggest traders wait for a breakout and close (UTC time) above the triangle before buying. The initial stop loss can be kept below $122. If the bears sink the price below the triangle, a retest of the recent low at $117.09 is possible.
Both the bulls and the bears are playing it safe, hence, XRP has extended its stay inside the $0.18339 to $0.20041 range. The 20-day EMA is flattening out and the RSI has been gradually moving up. This suggests that the selling pressure is reducing.
XRP USD daily chart. Source: Tradingview
A breakout of the range will suggest that bulls have the upper hand. Above the range, a move to $0.2326 is possible. Though the downsloping 50-day SMA might act as a resistance, we expect it to be crossed. Therefore, we retain the buy suggestion given in our previous analysis.
Our bullish view will be invalidated if the bears sink the XRP/USD pair below $0.18339. Such a move will drag the price to $0.17468.
The bulls are attempting to hold Bitcoin Cash (BCH) above the 20-day EMA, which is a positive sign. However, if the bulls fail to push the price above 50-day SMA within this week, it is likely to attract further selling that can drag the price towards $192.52.
BCH USD daily chart. Source: Tradingview
The 20-day EMA has flattened out and the RSI is close to the midpoint, which suggests a range-bound action for a few days.
If the bulls propel the BCH/USD pair above the 50-day SMA, a rally to $227.01 is possible. The traders can book partial profits at this level if the price struggles to rise above it. For now, traders can keep the stop loss on the long position at $181.
The failure of the bulls to keep Litecoin (LTC) above $42.0599 is a negative sign. It shows a lack of demand at higher levels. The bears will now try to sink the price to the immediate support at $39.252.
LTC USD daily chart. Source: Tradingview
A break below $39.252 can drag the price to the recent low at $35.8582. Therefore, the traders can keep the stop loss on the long position at $38.
The LTC/USD pair will turn bullish after the bulls sustain the price above $44. Above this level, we anticipate a move to $50. Though the 50-day SMA might offer some resistance, it is likely to be crossed.
The bulls have managed to keep EOS above $2.5804 in the current dip, which is a positive sign. However, if the price does not bounce sharply within the next couple of days, the bears will attempt to sink the price to $2.4001.
EOS USD daily chart. Source: Tradingview
Conversely, if the price bounces off the current level and rises above the 50-day SMA, a move to $2.8695 is possible. If the bulls struggle to scale above this level, the traders can book partial profits on their positions. For now, the stop loss on the long positions can be kept at $2.40.
Binance Coin (BNB) has been trading close to the 20-day EMA for the past two days. If the bulls can keep the price close to the current level, it will increase the possibility of a breakout of the overhead resistance at $14.5201.
BNB USD daily chart. Source: Tradingview
Aggressive traders can enter long positions on a break above $14.5201 as suggested in our earlier analysis. The first target objective is $16.50. However, if the BNB/USD pair slips below the downtrend line, it can drop to the recent low at $12.1111.
Bitcoin SV (BSV) has been trading between the 20-day EMA and the 50-day SMA for the past three days. We like the way the price bounced off the 20-day EMA on Dec. 30. If the bulls can push the price above the 50-day SMA, a rally to $113.96 is possible.
BSV USD daily chart. Source: Tradingview
The flattening moving averages and the RSI above 50 indicate that the selling pressure has reduced. Therefore, traders can retain the stop loss on their long positions at $83.
Contrary to our assumption, if the bulls fail to push the price above the 50-day SMA, the bears will again attempt to sink the price below the support at $92.693. If successful, a drop to $78.506 is possible.
Tezos (XTZ) dipped to the first support at $1.20 on Dec. 31. Though the level held, the bulls are struggling to push the price back above the moving averages. This shows selling at higher levels.
XTZ USD daily chart. Source: Tradingview
If the XTZ/USD pair turns down from the moving averages, the possibility of a drop to $1.10 increases. The bearish crossover on the moving averages also indicates that the bears have the upper hand.
Contrary to our assumption, if the bulls can push the price above the moving averages, a move to $1.40 is possible. We do not find any reliable buy setups at the current levels, hence, we remain neutral on the pair.
After failing to break above the overhead resistance at $0.047799, Stellar Lumens (XLM) is likely to dip to $0.042133. If the bears sink the price below this level, the downtrend will resume.
XLM USD daily chart. Source: Tradingview
If bulls defend the support at $0.042133, the pair might spend a few more days in a range. A break above the range will be the first indication that the bulls are back in the game. However, we will turn positive after the XLM/USD pair scales and sustains above $0.051014. Until then, we suggest traders remain on the sidelines.
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.
Market data is provided by HitBTC exchange.