As Bitcoin price slowly regains momentum, many altcoins have been rewarding traders by rallying to new all-time highs.
Price Analysis 8/12: BTC, ETH, XRP, LINK, BCH, BSV, LTC, ADA, XTZ, BNBPRICE ANALYSIS
On August 11 MicroStrategy, the world’s largest publicly traded business intelligence company, announced that it had ditched fiat currency and built its primary treasury reserve with Bitcoin (BTC).
The company’s CEO Michael J. Saylor believes that the coronavirus pandemic and the stimulus measures enacted to counter it will cause “a significant depreciating effect on the long-term real value of fiat currencies and many other conventional asset types.”
Saylor further explained that Bitcoin “is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash.”
Daily cryptocurrency market performance
Daily cryptocurrency market performance. Source: Coin360
On similar lines, BitGo CEO Mike Belshe also warned that the aggressive money printing will devalue fiat currencies and make them worthless to holders. Belshe urged investors to invest at least 3% of their portfolio in Bitcoin because it is “the lowest risk, highest asymmetric upside investment” many will see in their lifetime.
The bulls again failed to propel Bitcoin above the overhead resistance of $12,113.50 on Aug. 10, and this resulted in profit booking by short-term traders. The correction pulled the price down to the 20-day exponential moving average ($11,127) but the bears could not break this support.
BTC/USD daily chart
BTC/USD daily chart. Source: TradingView
This shows that the bulls are aggressively buying the dips to the 20-day EMA support. In an uptrend, when the price bounces off the 20-day EMA, it usually increases the possibility that the uptrend will resume.
If the BTC/USD pair closes (UTC time) above $12,113.50, the momentum is likely to pick up and a quick move to $13,000 is possible. The bears are likely to defend this level, which can result in a minor consolidation or correction, but if the bulls do not give up much ground, the uptrend is likely to extend to $14,000.
This bullish view will be invalidated if the bears sink the pair below the critical support zone of $10,400–$10,000.
Ether (ETH) remains positive as the price has held above the critical support at $366 for the past few days. This shows that the bulls are accumulating on dips to this level.
ETH/USD daily chart
ETH/USD daily chart. Source: TradingView
The moving averages are rising and the relative strength index is in the positive zone, which shows that the bulls are in command.
A break above the downtrend line will signal strength and the momentum is likely to pick up above $415.634. Above this level, the uptrend can reach $480.
This bullish view will be invalidated if the ETH/USD pair reverses direction from the downtrend line and plummets below the 20-day EMA ($357). Below this support, the correction can extend to the 61.8% Fibonacci retracement level of $304.367.
The bulls had pushed the price above the falling wedge on Aug. 11 but they could not sustain the higher levels. The bears used this to their advantage and sold aggressively, dragging XRP below the wedge.
XRP/USD daily chart
XRP/USD daily chart. Source: TradingView
However, the bulls purchased the dip to the 20-day EMA ($0.27) and are currently attempting to push the price back above $0.284584. If they succeed, it will be a positive sign.
Both moving averages are sloping up and the RSI is in the positive territory, which suggests that the path of least resistance is to the upside. A break above the wedge and the $0.307301 resistance will signal strength and increase the possibility of a rally to $0.326113.
This bullish view will be invalidated if the XRP/USD pair turns down from the resistance and breaks below the 20-day EMA.
Chainlink (LINK) remains in a strong uptrend as the correction from the $14.4586 level only lasted for two days on Aug. 10 and 11. During this, the bears could not even break below the immediate support of $12, which shows that the bulls are aggressively buying the dips.
LINK/USD daily chart
LINK/USD daily chart. Source: TradingView
The sharp bounce off the $12 levels has already pushed the LINK/USD pair above the $14.4586–$14.8537 resistance zone. The next target is the 261.8% Fibonacci extension level of $17.4319 and if this level is also scaled, then the next level to watch out for is $20.
However, as the pair hits new highs, the RSI has again risen into deeply overbought levels. Although the RSI can remain overbought for an extended period of time, vertical rallies rarely sustain. Therefore, traders can consider trailing the stops on their positions instead of becoming greedy.
Bitcoin Cash (BCH) broke below the 20-day EMA ($284) and the $280 support on Aug. 11, but a minor positive is that the bulls managed to close (UTC time) the day at $281.87.
BCH/USD daily chart
BCH/USD daily chart. Source: TradingView
Today, the bears again attempted to resume the down move by plunging the BCH/USD pair below $270. However, the bulls bought the dip and have pushed the price back above $280, which is a minor positive.
The 20-day EMA has flattened out and the RSI is just above the midpoint, which suggests a balance between supply and demand. A break above the downtrend line will be the first sign that the advantage might be shifting in favor of the bulls.
This view will be invalidated if the pair breaks and closes (UTC time) below $280. Such a move could drag the price to $260.
The failure to push the price higher attracted profit-booking by the traders on Aug. 11, which resulted in a break below the 20-day EMA ($214). The bulls are currently attempting to keep Bitcoin SV (BSV) above the $200 support.
BSV/USD daily chart
BSV/USD daily chart. Source: TradingView
Any bounce from the $200 level will face resistance at the downtrend line and again at $227. If the BSV/USD pair turns down from this resistance, a few days of consolidation between $200–$227 is possible.
The 20-day EMA is flat and the RSI is just below the 50 level, which points towards a possible range-bound action in the near term.
However, if the pair turns down from either resistance and breaks below $200, it will be a huge negative and could result in a drop to $160.
Litecoin (LTC) broke below the $56–$60 range and the 20-day EMA ($54.70) on Aug. 11, which resulted in a retest of the breakout level of $51. The altcoin has bounced off this support, which is a positive sign as it shows that the bulls are attempting to defend this level.
LTC/USD daily chart
LTC/USD daily chart. Source: TradingView
The 20-day EMA has flattened out and the RSI is close to the midpoint, which suggests a range-bound action for a few days.
On the upside, a break and close (UTC time) above the descending channel will be the first sign of strength. This will increase the possibility of a rally to $60 and then to $65.1573. The uptrend is likely to resume if the LTC/USD pair sustains above $65.1573.
The trend will turn in favor of the bears if the pair turns down from the current levels and breaks below $51.