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Market data is provided by the HitBTC exchange.
2018 has not been a profitable year for most asset classes. Tightening interest rates by the United States Federal Reserve, slowing growth, trade wars and fears of a recession have led to a sharp slump in various markets.
Leading crypto companies like Beijing-based Bitmain Technology, the world’s biggest producer of cryptocurrency mining rigs, and Huobi Group, the operator of one of the world’s largest cryptocurrency exchanges, are planning layoffs. While this signals troubled times for crypto companies, such cycles are part and parcel of every industry.
However, it is only the crypto asset class that has been facing predictions of an impending demise. In 2018 alone, analysts have written Bitcoin’s “obituary” on numerous occasions. We believe that cryptocurrencies will bounce back in 2019, and will again catch investor’s attention.
Nevertheless, the recovery for cryptos will be a slow and gradual process. Unlike before, investors will wait for possibility to become a reality before pushing prices higher. Hence, institutional activity, regulations, and wider adoption will be some of the triggers that will be closely watched.
In the short-term, Morgan Creek Digital Assets founder Anthony Pompliano expects Bitcoin to break below $3,000. But what do the charts project? Let’s find out.
Bitcoin turned down from the overhead resistance of $4,255 on Dec. 24 and has broken below the 20-day EMA. It is currently trying to stay above the support at $3787.33. The price is stuck between $4,255 and $3,787.33. A breakdown of the support will weaken the pullback and will increase the probability of a retest of the lows.
Conversely, if the price holds $3,787.33, it will again attempt to breakout of $4,255. If successful, the recovery can extend to $4,914.11 with a minor resistance at the 50-day SMA.
The 50-day SMA is still sloping down and the RSI has also dipped back into the negative territory. This shows that the bears are trying to regain their hold over the BTC/USD pair. If either level of the current range does not break, we can expect a few more days of consolidation.
There is an outside chance of an inverted head and shoulders pattern if the virtual currency breaks out and closes (UTC time frame) above the neckline. Such a breakout has a pattern target of close to $5,500.
We can confirm a bottom if the current dip forms a higher low and the next rally makes a higher high. The next few days are critical for the leading cryptocurrency.
Ripple could not sustain above the $0.40 level. Profit booking has pushed prices back below $0.40 and the 50-day SMA.
If the XRP/USD pair rebounds from the 20-day EMA, it will again attempt to breakout of $0.40. If successful, it can rise close to the resistance line of the downtrending channel. The traders can hold their long positions with stops at the break-even point.
A break below the 20-day EMA and $0.33108 will weaken the pullback and plunge the digital currency back to the support line of the channel. The price action of the next 3–4 days will give us a better idea of what to expect.
Ethereum turned down from close to $167.32 on Dec. 24 as we had expected. Currently, the bulls are trying to hold the 50-day SMA. If successful, we anticipate another attempt to breakout of $167.32.
On the other hand, if the ETH/USD pair fails to hold the 50-day SMA, it can slide to the 20-day EMA. If the support holds, we expect the digital currency to enter into a consolidation.
Our neutral to bullish view will be negated if the bears sink the price below $100. Any break below $83 will resume the downtrend.
After its scintillating run, short-term traders booked profits in Bitcoin Cash close to the 50-day SMA. Currently, the bulls are trying to bounce off the 20-day EMA but are not finding buyers at higher levels.
The 20-day EMA is flat and the RSI is close to the 50. This points to a probable consolidation in the near term. This view will prove to be wrong if the bears sink the BCH/USD pair below the 20-day EMA. The next support on the downside is $100.
If the bulls bounce off the 20-day EMA and break out of $239, the digital currency will resume its recovery and can reach $262.43 and $307.01. If the price turns down from $239, a consolidation will ensue. We shall get a better picture within the next 3–4 days. Traders who have any partial positions left should continue to trail their stops.
The recovery in EOS hit a major roadblock at the 50-day SMA. Currently, the bulls are attempting to hold the 20-day EMA. Below this level the next major support is $2.4050.
If one of these supports hold, we can expect another attempt to break out of the 50-day SMA. However, if the bears sink the…