Gold made a new lifetime high today, eclipsing the previous high made in 2011. This is possibly the result of investors buying the asset as a way to hedge against the possible debasing of fiat currencies due to the huge stimulus packages announced by various central banks around the world.
To date, gold has rallied just over 26% under very favorable circumstances, while Bitcoin (BTC) is up about 50% even when it has been out of favor among investors. This shows that the relatively new asset is braving its first crisis since formation and outperforming traditional safe havens with ease.
Daily cryptocurrency market performance
Daily cryptocurrency market performance. Source: Coin360
Today, the top-ranked asset on CoinMarketCap followed gold higher by breaking sharply above a stiff overhead resistance at $10,500. This is likely to improve sentiment across the crypto space and also attract new investors.
If institutional investors decide to allocate even a small portion of their funds into Bitcoin, the rest of the year could see a sharp rally.
Bitcoin (BTC) has broken out of the critical overhead resistance at $10,500. This completed three different bullish setups that can provide the traders with short-term, medium-term, and long-term target objectives.
BTC/USD daily chart
BTC/USD daily chart. Source: TradingView
If the price closes (UTC time) above $10,400, it will complete the bullish ascending triangle pattern that has a target objective of $11,870.50. This is the short-term target.
Next, if the BTC/USD pair closes (UTC time) above the $10,400–$10,500 resistance zone, it will complete a bullish inverse head and shoulders pattern that has a target objective of $16,997. This is the medium-term target.
The bulls have already driven the pair above the resistance line of the large symmetrical triangle. This setup has a target objective of $28,881.90, which is likely to be achieved in the long-term.
However, if the pair fails to sustain above the $10,400–$10,500 resistance zone, the bears will try to sink the price back below $10,000. If that happens, it will be a huge negative as it will indicate a lack of demand at higher levels.
Ether (ETH) has been in a strong uptrend since breaking out of the $253.556 resistance, which shows that traders are aggressively buying as they fear missing out on the rally.
ETH/USD daily chart
ETH/USD daily chart. Source: TradingView
The vertical rally of the past few days has pushed the relative strength index deep into the overbought zone. History suggests that the second-ranked cryptocurrency on CoinMarketCap enters a correction when the RSI reaches above 87 levels.
In mid-May of last year, the correction was shallow and the ETH/USD pair resumed the up move after a few days of consolidation. However, in mid-Feb. of this year, the pair formed a top and the price plunged, giving back all its gains.
Therefore, chasing the price after the recent rally might be a risky strategy. It is better to wait for a dip or a consolidation before entering fresh positions as it gives a logical stop-loss and improves the risk to reward ratio.
The first support on the downside is $288.599. A bounce off this support will be a positive sign as it will indicate strong demand on dips. The next target on the upside is $366. If the momentum scales above this level, the next target on the upside is $480.
Contrary to the assumption, if the bears sink the price below $288.599, it will signal that the momentum has weakened and it could result in a deeper correction or a few days of consolidation.
XRP broke above the neckline of the inverse head and shoulders pattern on July 25. The pattern target of a breakout from this bullish setup is $0.25. Generally, after the breakout, the price retests the neckline.
XRP/USD daily chart
XRP/USD daily chart. Source: TradingView
If the fourth-ranked cryptocurrency on CoinMarketCap rebounds off the neckline, the up move is likely to start. There is a minor resistance at $0.235688 but it is likely to be scaled. The rising 20-day Exponential moving average ($0.20) and the RSI in the overbought zone suggests that the bulls are in command.
However, if the bears sink and sustain the XRP/USD pair below the neckline, it will be a huge negative. This could result in a drop to $0.188499 as traders who had bought following the breakout of the neckline will be forced to cover their positions.
Bitcoin Cash (BCH) has broken out of the $260 resistance, which shows that the bulls continue to buy at higher levels. The next level to watch out for is $280.47.
BCH/USD daily chart
BCH/USD daily chart. Source: TradingView
If the bulls can propel the fifth-ranked cryptocurrency on CoinMarketCap above $227, a new uptrend is likely. The pattern target of a break above the large $280.47–$200 range is $360.94.
However, if the bulls fail to push the BCH/USD pair above $280.47, a drop to $260 is possible. A break below this level will signal weakness and will indicate that the range-bound action is likely to continue for a few more days.
Bitcoin SV (BSV) has broken out of the overhead resistance at $200, which is a positive sign. The bulls will now try to carry the altcoin to the next resistance at $227.
BSV/USD daily chart
BSV/USD daily chart. Source: TradingView
If the sixth-ranked cryptocurrency on CoinMarketCap breaks above $227, a new uptrend is possible. The pattern target of such a breakout is $308. There is a minor resistance at $260 but it is likely to be crossed.
Contrary to this assumption, if the BSV/USD pair turns down from $227, it could remain range-bound between $220–$227 for a few more days.
Cardano (ADA) surged on July 25 and broke above the pennant and the horizontal resistance at $0.1380977. The pattern target of this move is $0.173.
ADA/USD daily chart
ADA/USD daily chart. Source: TradingView
However, profit booking at higher levels has resulted in a retest of the breakout level from the pennant. If the seventh-ranked cryptocurrency on CoinMarketCap rebounds off this level aggressively, the bulls will again attempt to resume the uptrend.
Conversely, if the bears sink the ADA/USD pair below $0.13, a drop to the 20-day EMA ($0.12) is possible. A break below this level will signal a possible change in trend. The bearish divergence on the RSI suggests that the momentum has weakened in the short-term.
Litecoin (LTC) remains stuck inside the $39–$51 range. The altcoin soared above $46 on July 25 but the bulls have not been able to push the price above $51, which shows that the bears are aggressively defending the resistance of the range.
LTC/USD daily chart
LTC/USD daily chart. Source: TradingView
The eighth-ranked cryptocurrency on CoinMarketCap dipped below $46 on July 26 but the bears could not sustain the lower levels, which suggests that the bulls are accumulating on dips.
They are likely to make another attempt to propel the price above $51. If successful, a new uptrend is likely with the first target objective at $64.
This bullish view will be invalidated if the LTC/USD pair turns down from $51 and plummets back below $46. Such a move will indicate that the range-bound action is likely to continue for a few more days.