Can Facebook’s stablecoin and the Bakkt launch drive the next leg of the uptrend?
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The eagerly awaited cryptocurrency platform Bakkt will begin testing Bitcoin futures on July 22. Its launch is closely watched because it is expected to attract institutional investors who can drive the next leg of the uptrend. The recent recovery in cryptocurrencies has already led to increased interest in Bitcoin futures trading that resulted in record high open positions.
Another project that has generated huge interest is Facebook’s stablecoin dubbed “Libra.” The social media giant has been making some high profile hirings for the project, the latest being Standard Chartered Bank’s head of public affairs Ed Bowles. It has also managed to attract investment from various known firms such as Visa, Mastercard, PayPal and Uber that have invested around $10 million each for the project.
A report by Grayscale shows that Bitcoin was the best performer between May 5 and 31. It rallied 47% while most other asset classes were reeling under the uncertainty of the US–China trade war. The second-best performing asset was the Japanese yen, which was way behind at 2.1%. This shows the uncorrelated nature of Bitcoin and how it can be an important addition to any portfolio.
Bitcoin (BTC) has been sustaining above the 20-day EMA for the past two days, which is a positive sign. The bulls will now try to carry it to the recent highs of $9,053.12. A breakout of this resistance will propel the cryptocurrency to $10,000. The 20-day EMA has started to turn up once again and the RSI is inching higher into positive territory. This suggests that bulls have an advantage in the short term.
However, if the BTC/USD pair turns down well before breaking out of $9,053.12, it will be in danger of forming the right shoulder of the developing head and shoulders (H&S) pattern. This bearish setup will complete only if the pair plunges below the neckline. Until then, we will not preempt a fall.
On a breakdown of the neckline, the cryptocurrency can drop to $7,413.46, which is a critical support. The 50-day SMA is also located close to this point, hence, we anticipate a strong defense of this level by the bulls, but if this support cracks, the fall can extend to $5,900.
Ethereum (ETH) is range bound between $225.39 and $280. As the price is sustaining above the 20-day EMA, the bulls will attempt to push the price towards the top of the range at $280. A breakout of the range will start a new uptrend that can result in a move to $322.06 and above it to $335.
On the other hand, if the ETH/USD pair turns down from $280, it can again drop to the 20-day EMA. If this level breaks down, the next support is at $225.39. The 50-day SMA is located at this level, hence, this is likely to act as strong support. Still, if the bears sink the price below $225.39, it can slump to $167.20.
The best way to trade a range is to buy near the support and sell close to the resistance. As the price is close to the center, we will not recommend a trade in it. We might suggest long positions if the cryptocurrency bounces off $225.39 or breaks out of the range.
Ripple (XRP) has been struggling to stay above the 20-day EMA. This is a bearish sign as it suggests that buying dries up at higher levels. The 20-day EMA is flat and the RSI is close to the midpoint, which points to a consolidation in the short term.
The XRP/USD pair has strong support in the $0.35660–$0.37835 zone. If the pair bounces off this zone, the bulls will again try to push it back above the 20-day EMA. On the other hand, if the support breaks down, the cryptocurrency will become negative and can plunge to the critical support of $0.27795. For now, traders can keep the stop loss on the long position at $0.35.
Litecoin (LTC) failed to sustain above the overhead resistance of $140.3450 on June 12. We hope traders booked partial profits on their remaining long position closer to $140 as suggested in the previous analysis. The remaining position can be protected with stops just below the 20-day EMA.
Usually, in a strong uptrend, the pullback lasts for one to three days. The trend in the LTC/USD pair is still bullish as both the moving averages are sloping up and the RSI is in positive territory.
The resistance line of the ascending channel will act as the first support and below it the next strong support is at the 20-day EMA. If the price rebounds from either level, the bulls will again try to scale $140.3450 and extend the rally to $158.91 and above it to $184.7940.
Conversely, if the cryptocurrency fails to bounce off the supports, it will turn negative. A fall below the 20-day EMA can drag it towards the 50-day SMA.
Bitcoin Cash (BCH) broke out of the 20-day EMA on June 13 but it has not been able to pick up momentum. This shows hesitation by the bulls at higher levels. The 20-day EMA is flat and the RSI is just above 50, which points to range-bound action in the near term.
Contrary to our assumption, if the BCH/USD pair picks up momentum, it can rally to $450 and above it to $481.99. However, if it fails to stay above the 20-day EMA, it can again correct to $363.71. The 50-day SMA is also located at this level, hence, we anticipate strong buying around this support. We will wait for a reliable buy setup to form before suggesting a trade in it.
EOS continues to trade between the 20-day EMA and the 50-day SMA. This shows a balance between both the bulls and the bears. The balance will tilt in favor of the bulls if the price breaks out of the overhead resistance at $6.8299. Following the breakout, the price can rise to the resistance line of the ascending channel and above it to $8.6503. Therefore we maintain the buy recommendation given in an earlier analysis.
If the EOS/USD pair plummets below the 50-day SMA and the support line of the ascending channel, the bears will be at an advantage. The next support to watch on the downside is $4.4930 and below it $3.8723. Currently, the 20-day EMA is marginally sloping down and the RSI is just below 50. This suggests that the consolidation might continue for a few more days.
Binance Coin (BNB) moved close to our first target of $38.6463356 but could not reach it. Profit booking near the highs quickly dragged it lower. This is a negative sign as it shows nervousness by the bulls at higher levels.
The first support at the 20-day EMA has failed to provide support. The BNB/USD pair can now plunge to the 50-day SMA. This is an important level to watch as it has not been breached convincingly, barring the fall on March 9. Therefore, traders who are long can retain the stop loss at $28. The pair will pick up momentum if it bounces off the support and ascends the overhead resistance at $38.6463356.
Bitcoin SV (BSV) rebounded from the 38.2% Fibonacci retracement level of the recent rally on June 13. The bounce carried it above the downtrend line but it has not been able to pick up momentum. This shows a lack of buyers at higher levels.
If the BSV/USD pair falls below the downtrend line once again, it can correct to $175. A breakdown of this support will signal further selling that can drag the price to $152.015, which is 50% retracement level of the recent rally.
On the contrary, if the pair finds support at the downtrend line, the bulls will try to push it to $240 and above it to the lifetime highs. Both the moving averages are trending up and the RSI is in positive territory. This suggests that bulls have the upper hand. However, we do not find any reliable buy setup with a good risk to reward ratio, hence, we are not proposing a trade in it.
Stellar (XLM) is struggling to stay above the 20-day EMA. Though the bulls pushed the price above the 20-day EMA on June 12, they could not sustain it. The price dropped back below the 20-day EMA on the next day itself. This shows a lack of buyers at higher levels.
We spot a descending triangle pattern in the short term that will complete on a breakdown and close (UTC time frame) below the support at $0.11507853. This bearish setup has a target objective of $0.06678607 but we anticipate strong buying at $0.08558676.
Our negative view will be invalidated if the XLM/USD pair breaks out of the descending triangle. A failure of a bearish pattern is a bullish sign, hence, a rally to $0.14861760 is possible. Above this level, the pair will complete an inverse H&S pattern that has a target objective of $0.22466773. We will wait for the price to close (UTC time frame) above $0.14861760 before recommending a long position.
Cardano (ADA) is facing stiff resistance at $0.10. It again turned back from this level on June 13. This is the fifth occasion that the bulls have failed to ascend the overhead resistance. We expect the bulls to defend the 20-day EMA and attempt a breakout of $0.10 once again. If successful, it will complete a rounding bottom pattern that has a target objective of $0.22466773. Therefore, traders can buy on a close (UTC time frame) above $0.10 and keep a stop loss of $0.0730.
Contrary to our assumption, if the ADA/USD pair dips below the 20-day EMA, it can correct to the 50-day SMA, which is strong support. If this support gives way, the pair can plummet to $0.057898. Currently, both the moving averages are flat and the RSI is close to the midpoint, which points to range-bound action for the next few days.