Bitcoin price continues to decline at $12,000, but altcoins have taken advantage of the range-bound action by rallying higher.
Price Analysis 8/10: BTC, ETH, XRP, BCH, LINK, BSV, LTC, ADA, BNB, CROPRICE ANALYSIS
Traders prefer to trade a trending market, as it generally moves in one direction and the retracements offer low-risk entry opportunities. This is because a trade that follows the major trend carries a greater possibility of earning profits than one in a volatile market.
As several cryptocurrencies started a trending move in July, web traffic to the crypto exchanges also increased by 13%, according to data from ICO Analytics.
Daily cryptocurrency market performance
Daily cryptocurrency market performance. Source: Coin360
The derivatives market also comes alive when the underlying market is trending as professional traders use leverage to make quick profits using the futures and options route. This could be one of the reasons for the sustained increase in Ethereum (ETH) options open interest over the past three months.
Several reasons can be attributed to the start of a trending move in an asset class. Max Keiser believes that capital fleeing Asia is one of the main reasons for the sharp rally in Bitcoin (BTC).
Let’s analyze the charts of the major cryptocurrencies to find out whether the uptrend is likely to resume or if it time for a correction to start.
The bulls are attempting to push Bitcoin above the overhead resistance of $12,113.50, which is a positive sign. This suggests that the bulls are not booking profits yet, which is frustrating the traders who have been left out because they are forced to buy at higher levels.
BTC/USD daily chart
BTC/USD daily chart. Source: TradingView
Both moving averages are sloping up and the relative strength index is in the overbought zone, which suggests that bulls are in command.
A breakout and close (in UTC) above $12,113.50 is likely to resume the uptrend. There is a minor resistance at $12,304.37, but that is likely to be crossed. Above this level, the uptrend can reach $13,000, and above it, $14,000.
Contrary to this assumption, if the bears aggressively defend the $12,113.50 level, the BTC/USD pair might correct to the 20-day exponential moving average of $11,052. A strong bounce off this level will increase the possibility of a break above the overhead resistance.
However, if the bears sink the price below the 20-day EMA, it will signal weakness. Below this level, a retest of the $10,400 level is possible. A drop below this support will signal that the bears are back in the game.
Ether has been trading above the breakout level of $366 for the past few days — a huge positive, as it shows that the bulls are not hurrying to liquidate their positions. This suggests that the bulls expect the uptrend to continue.
ETH/USD daily chart
ETH/USD daily chart. Source: TradingView
Both moving averages are sloping up and the relative strength index (RSI) is in the overbought zone, indicating that the path of least resistance is to the upside. A breakout and close above $415.634 will signal a resumption of the uptrend toward the next target of $480.
However, if the bears defend the $415.634 resistance, the ETH/USD pair might spend some more time inside the range.
This bullish view will be invalidated if the bears sink the price below $366. Such a move will suggest a weakening momentum that can drag the price to the 20-day EMA of $351. A break below this support could signal a deeper correction to 61.8% and a Fibonacci retracement level of $304.367.
XRP is currently trading inside a falling wedge pattern, which usually acts as a bullish setup. If the bulls can push the price above the wedge, the uptrend is likely to resume with the first target at $0.346727 and then $0.432105.
XRP/USD daily chart
XRP/USD daily chart. Source: TradingView
The correction from $0.326113 has been healthy, as it has pulled down the RSI from deeply overbought levels. Both moving averages are sloping upward, which suggests that the bulls have the upper hand.
This bullish view will be invalidated if the bears sink the price below the wedge and the 20-day EMA ($0.267). Such a move will be a negative sign that can drag the XRP/USD pair to the 61.8% Fibonacci retracement level of $0.244472.
Bitcoin Cash (BCH) dipped to the 20-day EMA of $284 on Aug. 7 and again on Aug. 10, suggesting that the bears are attempting to sink the price back below the breakout level of $280.
BCH/USD daily chart
BCH/USD daily chart. Source: TradingView
If they succeed, it will be a huge negative, as it will indicate a lack of demand at higher levels. Such a move could result in a fall to $260 and then to $245.
However, the 20-day EMA is gradually sloping up and the RSI has been sustaining above 60, which suggests a slight advantage to the bulls.
If the bulls can push the price above the downtrend line, it will signal advantage to the bulls. Above this resistance, a rally to $353 is possible. A breakout of this level could resume the uptrend to $400.
Chainlink (LINK) dipped on Aug. 7 to $9.05, but the bears could not sustain the lower levels. By close, the price had recovered sharply from the intraday lows, which shows aggressive buying by the bulls.
LINK/USD daily chart
LINK/USD daily chart. Source: TradingView
This move seems to have caught the aggressive bears on the wrong side, and they were forced to cover their short positions as the price broke out to new highs, which resulted in a strong rally on Aug. 8 and 9.
The LINK/USD pair rose to a high of $14.4586 on Aug. 9, which is just below the 200% Fibonacci extension level of $14.8537. The bears are likely to mount a stiff resistance in the $14.4586–$14.8537 zone, while the RSI has also risen into the deep overbought zone, suggesting a minor consolidation or correction.
Contrary to this assumption, if the bulls continue to buy at higher levels and push the price above the resistance zone, a rally to the 261.8% Fibonacci extension level of $17.4319 is possible.
The bulls are struggling to push Bitcoin SV (BSV) above the $240 resistance, which suggests a lack of demand at higher levels. However, on the downside, the bulls are buying the dips to $214.
BSV/USD daily chart
BSV/USD daily chart. Source: TradingView
The 20-day EMA of $216 is flattening out and the RSI is gradually falling, which suggests that the bulls are losing their grip. If the bears sink the price below the 20-day EMA and the $214 support zone, a drop to $200 is possible.
On the other hand, if the BSV/USD pair rebounds off the 20-day EMA, the bulls will once again attempt to push the price above $240. If successful, a move to $260.86 is likely.
Litecoin (LTC) has roughly been trading between the $56–$60 level since Aug. 2. This suggests a balance between demand and supply. However, as both moving averages are rising and the RSI is in the positive zone, the advantage is with the bulls.
LTC/USD daily chart
LTC/USD daily chart. Source: TradingView
If the LTC/USD pair rises above $60, the advantage will shift in favor of the bulls. Above this level, a rally to $65.1573 is possible. This is the critical level to watch out for because, if the bulls can propel the price above this level, the momentum is likely to pick up.
Conversely, if the bears sink the pair below $56 and the 20-day EMA ($54.83), a drop to the critical support at $51 is possible. A break below this support will signal a possible change in trend but if the bulls buy the dip to this support, the pair might remain range-bound for a few more days.