At the time of writing, the positive momentum in the crypto markets is roaring on.
I can’t really say how or where the rally started. My personal bet is that it started with the Bitfinex controversy, which was in fact welcomed by a great deal of the crypto-community. Bitcoin has since broken past the $6,000, $7,000, and $8,000 levels with ease.
. @bitfinex is able to raise 1b USDt in 10 days, in a private sale. Private companies, giants in our industry and outside, made investments for > 100m each. A legion of inside and outside users made investments for > 1m each.
— Paolo Ardoino (@paoloardoino) May 13, 2019
According to Bitfinex CTO Paolo Ardoino, $1 billion of fresh cash has come into the market thanks to Tether. Is that true? I don’t know.
The pump could be linked to the Consensus conference currently taking place in NYC, as we’ve seen similar movements prior to this crypto-conference during previous years. Some other bullish news in the space is Microsoft’s latest identity developments – that make use of public-blockchain technology – and Bakkt finally announcing the launch of a full Bitcoin-settled futures contract later this year.
Let’s take a look at how the top cryptocurrencies are performing.
Bitcoin’s rally went parabolic this weekend, boosted by the further escalation in the US-China trade war. But I believe the counter-trend move is very likely over. While a retest of the highs is possible, I still don’t expect a durable breakout in BTC, and a pullback below the structurally important $5,850 level could be ahead in the coming days. However, the rise of BTC past the $8,000 price level shows how bullish the momentum is, and Bitcoin could easily prove me wrong.
At the time of writing, Bitcoin is sitting way above $8,150.
I personally wouldn’t advise traders to enter even small positions in light of the recent price action. Support levels are now found near $6,250 and $6,500, while below the $5,850 level, further strong support is found near $5,400. Volumes show a decline back to these levels has the greatest likelihood, even though I personally would like the price of Bitcoin to continue shooting to the moon. Right now, I expect the next support level to be around $7,800.
Don’t forget I consider Bitcoin to be in a bull run when the 20-day EMA is above the 50-day EMA and the latter is above the 200-day EMA. Only then will I truly believe buyers are totally in control and enough new cash has definitely poured into the market. BTC is almost there, as the 50-day EMA has already moved above the 200-day EMA.
Looking at the Ethereum chart above, we can clearly see a couple of new interesting features. Firstly, the 20-day EMA has crossed the 50-day EMA, which is a very bullish signal. Price is now also trading well above the 200-day EMA. Moreover, there could now be new support forming around $185, just above the 200-day EMA. The newly achieved yearly highs for Ethereum have been brought about thanks to the massive boost in Bitcoin last week.
So not only is the technical analysis bullish, but the fundamentals are as well. I’m personally expecting price to keep making gains for a few days before correcting to around the 200-day EMA price level. The next support levels I see are around $205 and $201, and then between $185 and $193. In terms of resistance, I really can’t say. If we continue to see fresh cash coming into the market, I would expect price to go past the $245 barrier – something we haven’t seen since mid-September 2018.
Bitcoin Cash (BCH) is currently sitting at around $390 – almost 18% higher than last week.
Bitcoin is still gaining market-share dominance over most coins, including BCH, and BCH price is currently trading at its lowest against BTC since late 2018. However, this doesn’t mean investors won’t take this opportunity to convert BTC into BCH. Bitcoin Cash has broken the $330 level around its 200-day EMA (the blue line) and the 20-day EMA has finally crossed the 50-day EMA (the red and green lines respectively). Moreover, the trend seems to be quite bullish: volumes speak for themselves, and the market hasn’t seen such positive volumes coming in since early April.
What I expect to happen is altcoins such as BCH, ETH, XRP, and LTC will rise both against BTC (even though prices may drop) and USD.
If order books stay on the side of buyers, which will become increasingly difficult the more price goes up, we could see BCH climbing again to $400 and above in just a few days.
Ripple (XRP) has been one of the top performing coins this week. Just look at the chart above. In the space of just a few days, price skyrocketed from about $0.294 to $0.44 – representing a 33% rise in price.
Not only that, but XRP managed to cross the 20-day, 50-day, and 200-day EMAs as volumes went berserk. I expect support to be around $0.38 and then again at $0.33. If Ripple can maintain this epic momentum and avoid any sell-offs by long-term holders, we could see it trying to overtake Ethereum again. However, that’s a bit of a stretch, as XRP’s volume is still less than half of ETH’s volume.
Although Litecoin has been underperforming compared to other altcoins, we shouldn’t forget LTC has been on a bull run since February – and it hasn’t stopped yet.
From last week, LTC has gained close to 20%, which is a quite amazing achievement from a coin that was trading around $30 in January 2019 and peaked at $100 in April. Fundamentals remain strong as LTC’s adoption keeps rising due to small fees and faster block times.
LTC is the only coin that is bullish by the book: the 20-day EMA is above the 50-day EMA, which is above the 200-day EMA. Plus, volumes are quite high around key levels, way above $90. I see LTC support being around $89 and $73, while resistance should come closer to the $100 level.
My personal bet is that we’ll soon see a nice correction and have another buying opportunity. I’ll have some fresh cash available to make new entries in the market as soon as it dips.
Still, be aware we may still experience close to 60% drops, as a similar situation happened during 2015 prior to the last massive bull run.
Trade with care!
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