The bounce in most major cryptocurrencies shows demand at lower levels and also increases the possibility of an up move in the next few days.
The recent carnage in US crude oil futures and the selling in Brent affected the equity markets but did not cause any noticeable fall in the crypto markets. This is a positive sign as it suggests that the crypto markets are gradually decoupling from other assets that are perceived as risky.
A recent Bloomberg report outlined several reasons to support their view that Bitcoin is ready for a bull run in 2020. According to Bloomberg, “the unprecedented monetary stimulus” in the wake of the COVID-19 crisis will benefit both gold and Bitcoin. It has said that Bitcoin will become digital gold in 2020. This suggests that mainstream media is also gradually recognizing the potential of Bitcoin, a point crypto enthusiasts have been proclaiming for a long time.
Daily cryptocurrency market performance. Source: Coin360
Being a new asset class, the transition from fiat to crypto will take time and this slow pace of change sometimes rattles investors. Veteran trader Peter Brandt recently asked whether Bitcoin was “actually living up to its high expectations?” He pointed out the low corporate interaction as the reason that made him voice his concern about Bitcoin adoption.
While the world goes into a money printing spree, Bitcoin’s upcoming halving in the midst of the largest crisis in decades is a reminder of how it is different from fiat. Global events and political aspirations cannot tamper with it. Advantages such as these could gradually attract people towards crypto and the rate of adoption could increase due to the current crisis.
Bitcoin (BTC) has been trading inside the $6,471.71-$7,454.17 range for the past few days, without a clear sense of direction. The 20-day exponential moving average ($6,931) is flat and the relative strength index has been hovering around the 50 mark, which suggests a balance between the bulls and the bears.
BTC–USD daily chart. Source: Tradingview
A symmetrical triangle, which usually acts as a continuation pattern, is forming inside the range. If the bulls can push the BTC/USD pair above the triangle, it will be the first indication that the bulls have overpowered the bears and an up move is likely.
On a break above $7,454.17, a quick move to $8,000 is possible. The bears might mount a defense of this level but it is likely to be scaled. Above this, the up move can reach $9,000 levels.
Conversely, if the bears sink the pair below the triangle, it will signal weakness. Below the triangle, a drop to $6,471.71 is likely but if this level also gives way, the pair is likely to drop to $5,600. Therefore, the stop loss on the long positions can be trailed higher to $6,200.
Ether (ETH) is currently trading inside an ascending channel. On April 20, the bulls purchased the dip to the 20-day EMA ($162.60), which is a positive sign. This shows that the sentiment is to buy the dips.
ETH–USD daily chart. Source: Tradingview
The 20-day EMA ($165.23) is sloping up and the RSI is in the positive territory, which suggests that bulls have the upper hand.
If the buyers can push the ETH/USD pair above $176.103, a move to the resistance line of the ascending channel is possible. This level might again act as a resistance but if the bulls can drive the price above the channel, a rally to $250 is likely.
The bearish scenario would come into play if the bears sink the pair below the ascending channel and the horizontal support at $148. If this level cracks, it could result in a deeper correction. Therefore, the long positions can be protected with a stop loss of $145.
The bulls purchased the dip to the support of the $0.20570-$0.17372 range on April 20. While this is a positive sign, the failure of the bulls to carry XRP above the downtrend line could indicate a lack of demand at higher levels.
XRP–USD daily chart. Source: Tradingview
Currently, both moving averages are flat and the RSI is also close to the midpoint, which suggests a balance between the buyers and sellers.
The XRP/USD is likely to pick up momentum after the bulls propel the price above $0.20570. Above this level, a rally to $0.25 is possible.
However, if the pair turns down from the current levels or from the downtrend line and breaks below $0.17372, it will indicate that bears have the upper hand. Therefore, the stop loss on the long positions can be kept at $0.165.
Bitcoin Cash (BCH) has been trading below the moving averages since April 20, which is a negative sign. A bearish head and shoulders pattern is also developing that will complete on a break below $200.
BCH–USD daily chart. Source: Tradingview
If the BCH/USD pair sustains below $200, the H&S pattern has a target objective of $119.53. Therefore, the long positions can be protected with a stop loss of $197.
This bearish view will be invalidated if the bulls can carry the price above the moving averages and the overhead resistance at $250. Such a move will indicate strength. The momentum could pick up above $280.47, opening the gates for a possible rally to $350.
Bitcoin SV (BSV) is attempting to bounce off the support line of the symmetrical triangle. The next trending move could start after the price breaks out or breaks down from the triangle. Currently, the 20-day EMA ($187.95) is flat and the RSI is close to the midpoint, which suggests a balance between supply and demand.
BSV–USD daily chart. Source: Tradingview
A breakout of the triangle will be the first indication that the bulls have gained the upper hand. The bears might again defend the overhead resistance at $227 but if this level is crossed, an up move to $268.842 is possible.
Conversely, if the bears succeed in breaking below the triangle and the horizontal support at $170, the BSV/USD pair could decline to $110. Hence, the long positions can be protected with a stop loss of $165.
Litecoin (LTC) dipped below the 20-day EMA on April 20 but the bears could not sink the price to the horizontal support of $37.8582. The altcoin is attempting a bounce off $39.5823, which is a positive sign as it shows that the bulls have stepped in at a higher level instead of waiting to buy at the support.
LTC–USD daily chart. Source: Tradingview
If the LTC/USD pair breaks out of the $43.67-$47.6551 resistance zone, a rally to $52.2767 and then to $63 is possible.
On the other hand, if the pair turns down from the overhead resistance zone, it can drop to $35.8582. A break below this level could be a huge negative as it will indicate that the bears have overpowered the bulls. Therefore, the stop loss on the long positions can be kept at $35.
EOS is range-bound between $2.3314 and $2.8319 for the past few days. The 20-day EMA ($2.54) is flat and the RSI is just above the midpoint, which suggests a balance between the buyers and sellers.
EOS–USD daily chart. Source: Tradingview
The advantage will tilt in favor of the bulls on a break above the overhead resistance at $2.8319. A breakout of the range gives the EOS/USD pair a target objective of $3.3324. If this level is also crossed, the next level to watch on the upside is $3.8811.
This view will be invalidated if the pair breaks down from the range at $2.3314. Such a move will give it a target objective of $1.8309. The stop loss on the long positions can be kept at $2.20.
Though Binance Coin (BNB) broke below the bearish rising wedge pattern on April 20, the bulls held on to the 20-day EMA ($14.88). This is a positive sign as it shows that the bulls are buying the dips to the 20-day EMA.
BNB–USD daily chart. Source: Tradingview
The gradually upsloping 20-day EMA and the RSI in the positive territory suggests that bulls have the upper hand. If the bulls can push the BNB/USD pair above the resistance line of the wedge, it will invalidate the bearish pattern. The next level to watch on the upside is $21.50.
However, if the current bounce fizzles out and the pair turns down and plummets below the 20-day EMA, it will signal weakness. A break below the horizontal support at $13.65 will indicate the likelihood of a deeper decline. Therefore, the protective stop loss on the long positions can be retained at $13.
Tezos (XTZ) dipped below the breakout level of $2.185 on April 20 but found support just above the 20-day EMA ($2). This is a positive sign as it indicates buying on dips to the 20-day EMA.
XTZ–USD daily chart. Source: Tradingview
Currently, the bulls are attempting to push the XTZ/USD pair above the overhead resistance of $2.3756. If successful, a rally to $2.75 is likely. The upsloping 20-day EMA and the RSI in the positive territory suggest that bulls have the upper hand.
This bullish view would be in danger if the pair turns down from the current levels and breaks below the 20-day EMA. A break below $1.8271 will shift the advantage in favor of the bears. Therefore, the stops on the long positions can be maintained at $1.75. If the price sustains above $2.40, the stops can be trailed higher to $2.
The bulls repeatedly failed to clear the overhead resistance of $3.83 from April 18-20. This resulted in a drop to $3.3729, which was purchased by the bulls. Currently, the bulls are again attempting to propel Chainlink (LINK) above the overhead resistance at $3.83.
LINK–USD daily chart. Source: Tradingview
If successful, the LINK/USD pair is likely to pick up momentum and resume its up move towards $4.9762. The bears might offer resistance at $4.2023 but the possibility of a break above this level is high.
The first sign of weakness would be a break below the trendline and the 20-day EMA ($3.22). If the bears sink the pair below $2.9450, a deeper decline is possible.
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Market data is provided by HitBTC exchange.