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Mt.Gox, the bankrupt Bitcoin exchange that collapsed in 2014, is soon expected to distribute $1 billion worth of cryptocurrencies to thousands of its creditors. As it has been a long wait, some might offload their Bitcoins as soon as they receive them. Can this produce the next leg of the downward move?
When the trade volumes are high, even such a large supply can only result in a knee-jerk reaction, because the buyers lap up the excess supply. However, the picture changes when the volume is low.
If the bulls anticipate a large supply, they might hold off their purchases expecting to buy at lower levels. With a lack of buyers prices plunge, panic selling sets in and the bears keep the markets under pressure.
On the other hand, if the recipients hold on to their Bitcoin and sell in a measured manner, the markets can easily absorb small amounts of fresh supply without causing any disruption. It will be interesting to see how the markets respond.
What are the important levels below or above which the trend changes? Let’s check the charts and find out.
The pullback from close to $6,075 stalled at the 20-day EMA, inviting fresh selling by the bears. Both negative formations – a head and shoulders and a descending triangle – will complete if Bitcoin breaks and closes below $5,900.
Though the pattern targets of such a breakdown are way lower, we anticipate support at $5,450 and $5,000.
If the bulls defend the $5,900–$6,075.04 support zone, the BTC/USD pair will again attempt to rebound higher. We shall turn positive if the price sustains above $6,600.
Currently, both moving averages are turning down and the RSI is also in a negative territory. This shows that a retest of the support lines is likely.
Considering the bearish patterns, we suggest traders wait for a successful retest of the supports and buy the subsequent pullback attempt. Until then, traders should watch the price action closely from the sidelines.
The failure of the bulls to break out of the 20-day EMA for the past three days has invited selling. Ethereum has a minor support at $203, below which the slide can extend to $183.17.
The trend remains bearish, as both moving averages are sloping down and the RSI has turned from the 40 level.
The ETH/USD pair will indicate a change in trend if it sustains above the downtrend line of the descending channel and the 50-day SMA. A few days of range bound action is likely. We shall wait for a new buy setup to develop before suggesting a trade on it.
Ripple has hardly moved up in the past four days. It continues to trade close to the support at $0.27. This shows that the buyers are in no hurry to get in at the current levels.
A break down of the $0.24508–$0.27 range will be a negative development that can lead to a further fall to $0.20.
If the bulls scale above the 20-day EMA, the XRP/USD pair can move up to the 50-day SMA and above that to $0.37390. We shall turn positive if the virtual currency sustains above the downtrend line, because that will signal a probable double bottom.
The buyers seem to have deserted Bitcoin Cash, as price continues to struggle close to the year-to-date lows.
The down sloping moving averages and the RSI in the negative region shows that the bears still have the upper hand.
The BCH/USD pair will show signs of a turnaround if it breaks out of the descending channel. Until then, all pullback attempts will face a stiff resistance at the 20-day EMA and the 50-day SMA. We shall wait for the virtual currency to form a reliable buy setup before proposing any trade on it.
EOS had been hovering close to the $5.65 mark for the past four days. As the bulls failed to break out of the overhead resistance, prices have turned down.
The prices can now slump to the next strong support at $4.493. If this support breaks, a fall to $4.1778 is probable.
If the support holds, the EOS/USD pair will attempt to break out of $5.65 and rally to $6.8299. Traders can hold the remaining long positions with stops at $4.4.
For the past five days, Stellar has been trading inside the large range bar formed on September 11. If the bulls scale the $0.21489857 mark, a move to the top of the range is probable.
The trend will turn negative only if the bears sink and sustain the price below $0.184. The longer the XLM/USD pair consolidates in the range, the stronger will be the eventual breakout or breakdown.
We didn’t find any reliable buy setups inside the range; hence, we shall wait for the breakout of the range to sustain for three days and then suggest a long position on the pair.
Litecoin has turned down from the 20-day EMA. The bears will now attempt to break the critical support at…