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The market data is provided by the HitBTC exchange.
On August 21, at 01:00 AM UTC time, Bitcoin prices surged, breaking out of the overhead resistance at $6,617.5. Within 20 minutes, Bitcoin spiked from $6,459.5 to $6,827.5, topping out at $6,888.32, an hour later.
The upward move coincided with the scheduled maintenance on BitMEX and looks to have been a short-term trade. However, a breakout above $6,617.5 is likely to have triggered stops on the short positions that had reached a four-month high on August 21. However, it is still too early to confirm if the trend has changed or not.
The Winklevoss twins have founded a self-regulatory organization, the Virtual Commodity Association, that aims to improve transparency among its members. Currently, it has four members, which will meet in September to set the rules and guidelines for the association.
This is another positive step that might allay some of the apprehensions of the U.S. Securities and Exchange Commission (SEC) regarding a Bitcoin exchange-traded fund (ETF). Two Bitcoin ETF proposals will come up for consideration this week and a few others in September. The SEC’s ruling will decide the next short-term trend for the cryptocurrencies.
Should the traders initiate long positions or should they remain on the sidelines? Let’s find out.
On August 21, the bears attempted to sink Bitcoin but the bulls bought the dip to $6,000, which is a positive sign. Today, the breakout of the overhead resistance of $6,617.5 resulted in a spike to $6,888.32, which triggered our buy proposed in the previous analysis at $6,750. However, the bulls could not hold on to the higher levels.
The bears have pushed prices back below the critical support at $6,617.5. This shows that the short sellers are pouncing on any short-term rise. The BTC/USD pair is likely to witness a few more days of range bound trading. The bears will make another attempt to break down of the critical support zone of $5,900-$6,000 within the next few days. If this support breaks, our assumption of a large range on the pair will be invalidated.
On the upside, $6,617.5 is the critical level to watch out for because the downtrend line of the descending triangle, the horizontal resistance and the 20-day EMA all converge at this point. If prices sustain above this level, the bulls are likely to make another attempt to break out of the 50-day SMA.
We suggest traders hold the long positions with the stop loss at $5,900. They can add the remaining 50 percent of the position after the cryptocurrency sustains above $7,000.
Ethereum is in a downtrend with both moving averages sloping down. It is struggling to even pull back to the 20-day EMA, which is a bearish sign.
If the bears succeed in breaking below the support zone of $249.93-$269.78, the ETH/USD pair can slump to $200.
On the upside, a breakout of the 20-day EMA can result in a rally to $358, which will act as a stiff resistance. The pair has not broken out of the 50-day SMA since May 24 of this year, hence, a break out of the 50-day SMA will indicate a change in trend.
The traders should wait for a buy setup to form before initiating any long positions.
The pullback on Ripple is facing resistance at the 20-day EMA and the bulls are struggling to sustain above the moving average. If this level is crossed, the bulls will again face selling pressure at the downtrend line 2 and above that at the 50-day SMA.
Once the bulls scale above the 50-day SMA, the XRP/USD pair can move up to $0.5, where it will again face resistance from the downtrend line 1.
The bulls are defending the $0.31 level on the downside. If this level breaks, a fall to $0.27255 and thereafter a retest of the lows at $0.24508 is probable.
We shall wait for some buying to return before turning bullish.
Bitcoin Cash has been trading between $500 and the 20-day EMA since August 15. If the bears sink the prices below $500, a retest of the $473.9060 line is probable.
On the other hand, if the bulls break out of the 20-day EMA, a rally to the downtrend line is likely. We shall turn positive if the BCH/USD pair sustains above the downtrend line for a couple of days.
Until then, it is best to remain on the sidelines.
EOS broke out of the downtrend line but could not cross the 20-day EMA. The bears have again pushed the prices back below the downtrend line. On the downside, the support is in the zone of $3.8723-$4.1778.
The EOS/USD pair has not broken out of the 50-day SMA since June 10. Hence, it is likely to act as a strong resistance. Once the bulls scale the 50-day SMA, a rally to $9 and thereafter to $11.6 is possible.
Our buy recommendation made in the previous analysis stands cancelled. We shall wait…