As some investors are leaving crypto, large institutional players are moving in, as they see value around the current price levels.
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The market data is provided by the HitBTC exchange.
Recommending investors to sell their Bitcoin in December of last year was against the general consensus, especially considering the lofty numbers that we were seeing back then. Similarly, telling investors to buy Bitcoin now, during sharp declines and in batches is against the prevailing negative sentiment.
Can we pinpoint the exact top and bottom? Definitely not.
But, the readers who followed us and sold close to the highs were spared this scarring bear market. Similarly, readers who start building a position now will not miss the boat when the next bull run begins.
We are noticing that while the retail investors are turning away from cryptocurrencies, larger – mostly institutional – players are showing greater interest in entering this space.
The latest such player to jump onto the cryptocurrency bandwagon was the hedge fund billionaire Steve Cohen who has invested in a new hedge fund, Autonomous Partners, which in turn invests in cryptocurrencies and blockchain-related companies.
It is worth noting that the institutional players did not enter the market when the price were at their highest points. They waited patiently for the fall and began investing in the past few weeks. This shows that they find value around the current price levels.
Let’s look at some critical levels that the investors should keep an eye on both on the upside and the downside.
We expected Bitcoin to find support close to $6,250 but it plunged down to $6,120.45 on July 12. This invalidates our expectations of an inverse head and shoulders pattern. Still, if the bulls defend the zone between $5900 and $6075, the digital currency can form a double bottom.
Led by Bitcoin, most cryptocurrencies are showing a positive divergence on the RSI. However, until confirmed by a bullish price action, we can’t take a trade on the basis of this divergence alone.
So, at what point does the trend change?
As the BTC/USD pair has still not broken down of the $6,000 threshold convincingly, there is no reason for us to abandon our anticipation of a large range of $6,000-$12,000.
We will change our view if the digital currency slumps below $5,900 and fails to recover above it quickly. Under such circumstances, the decline can extend to between $5,000 and $5,450.
On the upside, we shall add to our existing position once the pair breaks out of $7,000 because that improves the probability of a rally to $10,000 with minor resistances at $7,750 and $8,560.
Traders who follow us are holding long positions initiated at $6,650. We suggest to continue holding on to them until the bears succeed in sustaining below $5,900 for four hours.
We like Ethereum because it is trading above its April lows. This shows mild outperformance. If the bears fail to break below the June 29 low of $404.99 within the next couple of days, we anticipate a move to $500.
Once above $500, the digital currency should attract buyers, pushing the price towards $600, with a minor resistance at $550.
If the bears drive the ETH/USD pair below $404.99 within the next couple of days, the drop can extend to $358.
We might recommend long positions on a breakout above $500.
Ripple is hanging above the June 29 low of $0.4242 by the skin of its teeth. If this level breaks down, the next major support is at $0.24001. In between, there are minor support levels with the first one at $0.38, but it is difficult to hazard a guess where the buyers might step in.
The first sign of a pullback will be when the bulls break out of the downtrend line and the 20-day EMA. Still, it will not be a green signal to buy, because the XRP/USD pair will face resistance at $0.52 and then again at $0.56270.
We anticipate the digital currency to spend some time forming a bottom. We shall turn positive once we get a confirmation that the bottom is in place.
Bitcoin Cash continues to slide towards its June 29 low of $657.8. If this support breaks down, the next stop is at $619.7510. We anticipate the digital currency to find a bottom between these two levels.
The 20-day EMA is the first resistance on the upside, above which the BCH/USD pair can rally to $838.9139. On a close above the downtrend line, we expect strong buying to push price towards the $1,200 mark.
The coin has a history of vertical rallies. Hence, we shall suggest a long position as soon as we spot a buy setup.
The bulls have defended the $6.8926 mark for the past two days and are attempting to bounce from it. On the upside, EOS will face resistance at the downtrend line and above that at $9.4456.
Once these two levels are crossed, the digital currency should pick up momentum and move towards $15 with a minor resistance between $10.9 and $11.6.
However, if the bears force a break below $6.89, the next support on the downside is at $5.961, which will complete a 100 percent retracement of the previous rally. Below that, the EOS/USD pair can slide to $5.1801. We shall propose a trade only on a close above the $9.5 mark.
Litecoin continues to slide towards the critical support of $74.074, as the bulls have failed to break out of the descending channel for the past ten days.
If the $74.074 level breaks down, the next support is at $67. However, the RSI is forming a positive divergence, which indicates the formation of a probable bottom.
On the upside, the bulls will face resistances at $91.146, $102 and then at $107. We believe that the LTC/USD pair needs to spend some time building a base before starting a new uptrend. We shall wait for a breakout from the base before proposing any trades on it.
The bears are finding it difficult to break below $0.13 for the past three days. The range on Cardano has also tightened in the past two days. We should get a range expansion within the next few days.
If the bears break below the immediate support, the ADA/USD pair can slide down to $0.078215. This will also invalidate our assumption of a large range formation.
However, if the bulls defend the support zone between $0.111843 and $0.13, a move to $0.181617 is probable. We shall wait for a new buy setup to form before recommending a trade on it.
Stellar has been clinging on to the $0.184 support line for the past three days. However, the bulls have not been able to push the price higher.
If the XLM/USD pair doesn’t bounce within the next couple of days, the bears will attempt to sink it below $0.184. If successful, the next support on the downside is at $0.138565 and below that at $0.082332.
On the upside, a move above $0.22221471 will be a positive development, which can push the price towards $0.3. Until then, it is best to remain on the sidelines.
IOTA has been trading close to the critical support at $0.9150 for the past three days. Though our stops have not been hit, our recommended long position is deep in the red.
If the bears sink the IOTA/USD pair below the June 24 lows, it can drop to the next support at $0.666.
Any pullback from the current levels will face resistance at the downtrend line. The digital currency will pick up momentum once it breaks out of the overhead horizontal resistance at $1.33.
We suggest to hold the current long position with the stops below $0.8850.
Tron is trying to hold on to the $0.03275 level for the past three days but the bulls have so far been unable to force a pullback.
If the bears sink the TRX/USD pair below $0.03275, the next support on the downside is at $0.022806. We expect this price to attract buyers.
On the upside, the 20-day EMA and the downtrend line will be the important levels to watch out for. The positive divergence on the RSI is a minor positive but we shall wait for the bulls to scale the downtrend line before suggesting any long trades.
The market data is provided by the HitBTC exchange. The charts for the analysis are provided by TradingView.