When the markets disregard negative news and focus only on the positive news, it is a bullish sign. In the past week, the markets took the Bifinex and Tether controversy in its stride. Previously, news of exchanges being hacked led to a strong pullback in prices. However, this time, the cryptocurrencies have hardly budged following the news of Bitcoin hacking at Binance, which is one of the world’s largest exchange.
On the other hand, the market is bullish on the news that Fidelity Investments will start offering crypto trading for its institutional clients in a few weeks. Another positive was the news about Facebook coin. So, can this bullish sentiment continue or will the cryptocurrencies correct. Let’s find out.
Bitcoin continues to be in an uptrend. It did not enter into a correction at the overhead resistance of $5,920 as we had anticipated. This shows that the demand for the cryptocurrency is high and a breakout of $5,920 is likely.
Following this breakout, we anticipate the traders sitting on the sidelines to jump in. This can propel the price to $6,298.47 and if this level is also crossed, the next level to watch is $6,544. Both the moving averages are sloping up and the RSI is in the overbought zone. This shows that the path of least resistance is to the upside.
This bullish view will be invalidated if the cryptocurrency falters at one of the above-mentioned resistance levels and reverses direction. A fall below the 20-day EMA will be the first sign of weakening momentum. If the bears sink the price below the 50-day SMA and $4778.59 support, it will signal a change in trend. Traders who are long can continue to trail the stop loss below the 20-day EMA. Others, waiting to buy, should wait for a dip to enter as the risk to reward ratio at these levels is not attractive.
Litecoin has formed a rounding bottom pattern at the lows. This reversal pattern will complete on a breakout and close (UTC time) above $94.5. The target objective of this pattern is $165.87.
Currently, the bulls are attempting to hold the price above the moving averages. Both the moving averages have flattened out and the RSI is at the midpoint. This points to a probable consolidation in the near term. On the downside, $65 to $60 zone is the strong support, whereas, $84.64 to $94.5 is the strong resistance on the upside.
A breakdown of the support will signal a trend change and a deeper fall can be anticipated. On the other hand, if the bulls ascend the resistance zone, a rally is likely. Traders can buy on a breakout and close above $94.5 and keep the stop loss below the recent lows. The stops can be trailed higher as the digital currency moves in our favor.
Basic Attention Token participated in the recent rally and had a nice upswing from the lows to $0.4971. However, we are witnessing some profit booking at the highs that has dragged the price to 78.6% Fibonacci retracement levels of the recent leg of the upmove. Such a deep retracement indicates that the momentum is waning.
The 20-day EMA has started to turn down and the RSI has also dipped into the negative zone. This suggests that the bears have the upper hand in the short-term. If the cryptocurrency dips below $0.30759540, it can complete 100% retracement and fall to $0.2560 levels. We expect the buyers to defend this level.
On the other hand, if the bulls push the price above the 20-day EMA, a move to $0.42220 and above it to $0.49710 is probable. We shall wait for the digital currency to stop falling and reverse its direction before suggesting a trade in it.