The coronavirus pandemic and the economic crisis that it has brought along is the first of its kind in this generation. For weeks now, global equities markets have been swinging wildly due to the uncertainty. However, compared to the traditional markets, Bitcoin has been holding up quite well and its volatility has been gradually reducing in the past few days.
Pantera Capital Founder and CEO Dan Morehead believes that the current crisis “is like no other” and it can “have a larger global economic impact than any downturn in recent memory.” However, Morehead believes that after the initial days of correlation with the general markets, cryptocurrencies will start to trade independently. He expects the institutional investors to gradually enter the space and make big allocations to crypto that can carry Bitcoin to a new high “in the next twelve months.”
Daily cryptocurrency market performance. Source: Coin360
Bitbank market analyst Yuya Hasegawa recently revealed in an official blog post that Bitcoin’s volume and account registrations on its crypto exchange platform spiked following Bitcoin’s crash on March 12. This showed that retail investors wanted to buy the dip, a phenomenon not seen in November and December of 2018, the final stages of the crushing bear market.
Several major cryptocurrencies are attempting to form a bottom. If successful, we expect the buyers waiting on the sidelines to jump in, which is likely to pull the crypto markets higher. Let’s analyze the charts of the major cryptocurrencies and spot the critical levels that could suggest the start of a new uptrend.
Bitcoin (BTC) has stayed above the breakout level of $6,435 for the past three days but the bulls have not been able to scale $7,000. This shows a lack of buyers at higher levels.
BTC USD daily chart. Source: Tradingview
We now expect the bears to attempt to sink the BTC/USD pair below the breakout level of $6,435. If successful, a drop to $5,660.65 is possible. If this level also cracks, the decline can extend to $5,000.
On the other hand, if the pair bounces off the support at $6,435 and breaks above $7,000, it will resume the up move that can reach the 200-day SMA at $8,306 and above it $10,000. Therefore, traders can retain the stop loss on the long position at $5,600.
Ether (ETH) continues to trade near the midpoint of the $117.090-$155.612 range. This tight range trading is unlikely to continue for long. We expect the biggest altcoin to either move up to the resistance of the range or dip to the support at $117.090.
ETH USD daily chart. Source: Tradingview
If the bulls can carry the ETH/USD pair above the overhead resistance at $155.612, we anticipate the start of a new uptrend. Therefore, traders can initiate long positions as proposed in an earlier analysis.
Contrary to our assumption, if the pair dips to $117.090, it will indicate that bears are back in the game. A break below $117.090 can drag the price to the next support at $100.
XRP broke above the descending channel and closed (UTC time) above the horizontal resistance of $0.17468 on March 26. This triggered our buy suggested in an earlier analysis.
XRP USD daily chart. Source: Tradingview
If the bulls can sustain the XRP/USD pair above $0.17468, we anticipate a move to $0.21608 and above it to the 200-day SMA at $0.24.
Our bullish view will be invalidated if the pair reverses direction from the current levels and slides below the immediate support of $0.15708. Below this level, the pair can re-enter the channel and dip to $0.145. For now, the stops can be maintained at $0.143.
Bitcoin Cash (BCH) has broken out of the descending channel but is yet to scale and sustain above the 20-day EMA at $233. This shows that the bears are defending the 20-day EMA. If the altcoin turns down from the current levels, it can drop to $197.43. A break below this level will be a huge negative as it can drag the price to $166.
BCH USD daily chart. Source: Tradingview
On the other hand, if the BCH/USD pair can climb above the 20-day EMA, a move to the 200-day SMA at $273 and above it to $350 is likely. Therefore, we retain the buy recommendation given in the previous analysis.
Bitcoin SV (BSV) has been trading close to the 20-day EMA for the past few days. The 20-day EMA has flattened out and the RSI is just below the midpoint, which points to a possible range-bound action.
BSV USD daily chart. Source: Tradingview
If the BSV/USD pair turns down from the current levels, it can drop to $146.96, which is an important support. If this support holds, the pair might consolidate between $146.96 and $185.87 for a few days. A break below $146.96 can drag the price to $120.
Conversely, the pair is likely to pick up momentum on a break above $185.87. Above this level, the up move can reach $250. Therefore, the traders can hold their long positions with a stop loss of $146.
Litecoin (LTC) has broken out of the descending channel but the bulls have not been able to scale the price above the 20-day EMA at $42.28. This indicates that the bears are defending the 20-day EMA aggressively.
LTC USD daily chart. Source: Tradingview
If the LTC/USD pair turns down from the current levels and breaks below the $35.8582 support, a drop to $30 is likely.
On the other hand, if the bulls can drive the pair above the 20-day EMA, a new uptrend is likely. Above the 20-day EMA, the up move can reach the 200-day SMA at $55 and above it $63.8769. Therefore, we retain the buy recommendation given in the previous analysis.
EOS has been trading close to the overhead resistance at $2.4001 for the past three days. This is a positive sign as it shows that the bulls are not closing their positions in a hurry.
EOS USD daily chart. Source: Tradingview
If the bulls can propel the EOS/USD pair above $2.4001 and the 20-day EMA at $2.49, it could start a new uptrend. Therefore, traders can initiate long positions as recommended in our earlier analysis.
Our bullish view will be invalidated if the pair reverses direction from the current levels and plummets below $2.0632.
Binance Coin (BNB) has reached the 20-day EMA at $13.33, which is acting as a stiff resistance. If this level is crossed, the up move can reach the downtrend line where we anticipate the bears to mount a stiff resistance.
BNB USD daily chart. Source: Tradingview
The flattening 20-day EMA and the RSI just below the midpoint suggest that the selling pressure is reducing.
Nevertheless, if the BNB/USD pair turns down from the 20-day EMA, the bears will try to sink it below the horizontal support at $12.1111. Below this level, the next support to watch out for is $10.8427.
We do not find any reliable setup with an attractive risk to reward ratio, hence, we remain neutral on the pair.
Tezos (XTZ) continues to trade inside the bullish ascending triangle pattern. This setup will complete on a breakout and close (UTC time) above $1.955. The pattern target of a breakout of the triangle is $2.9004 and above it $3.30.
Therefore, traders can initiate long positions as suggested in our earlier analysis.
XTZ USD daily chart. Source: Tradingview
However, if the bulls fail to propel the XTZ/USD pair above $1.955, the bears will attempt to break it below the trendline of the triangle. If the price breaks and sustains below the trendline, it will invalidate the bullish setup.
On a break below the trendline, the decline can extend to $1.4453 and if that level also fails to hold, the next level to watch out for is $1.3351.
The bulls are struggling to push UNUS SED LEO (LEO) above the overhead resistance of $1.04. This shows that the bears are defending this resistance level. However, the positive thing is that the bulls have maintained the price between $1-$1.03 for the past few days.
Usually, such a consolidation near the resistance increases the likelihood of a breakout from it.
LEO USD daily chart. Source: Tradingview
A breakout of $1.04 will complete a bullish reversal pattern. Hence, the traders can buy on a breakout and close (UTC time) above the resistance as suggested in our earlier analysis.
Contrary to our assumption, if the bears sink the LEO/USD pair below the 20-day EMA at $0.998, a drop to the 50-day SMA at $0.956 is possible.
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.