Traders are accumulating Bitcoin on dips and a break above $11,600 could resume the uptrend to $12,000.
Data from Skew shows Bitcoin’s (BTC)
spot volume on LMAX Digital, an exchange that mainly caters to
institutions, has overtaken retail-oriented exchanges. This signals that
institutional investors could be building up positions as they expect
the price to move higher in the future.
Along with spot purchases,
institutional investors’ participation in the derivatives market has
also increased. Data from Arcane Research shows that a record number of
investors are taking delivery of Bitcoin from the Bakkt Bitcoin exchange.
Another metric that can be useful for traders is volatility. Bitcoin options data shows that the implied volatility
of at the money options has dropped to a 16-month low. This suggests
that traders do not expect a large down move in the near future, hence,
they are not willing to pay a greater amount to hedge their positions.
Although
data suggests that institutional investors are positioned for an upside
move, retail traders should keep a close watch on the price action and
take large bets only after a trending move starts.
Let’s study the charts of the top-5 cryptocurrencies that could start a trending move next week.
BTC/USD
Bitcoin (BTC)
has been holding above the 20-day exponential moving average ($11,137)
for the past few days. The buyers purchased the dip to the $11,165
support on Oct. 20, which suggests accumulation at lower levels.
If
the bulls can push the price above the downtrend line, the BTC/USD pair
could retest the $11,719 resistance. A breakout of this level may
resume the up-move with the first target at $12,000 and then $12,460.
Both
the short-term and the long-term moving averages are sloping up and the
relative strength index is above 61. This suggests that the bulls are
in control.
This positive view will be invalidated if the pair
turns down from the downtrend line and plummets below the 20-day EMA.
Such a move could pull the price down to the next support at $10,500.
The
4-hour chart has formed a bearish descending triangle pattern that will
complete on a breakdown and close (UTC time) below $11,165. This
bearish setup has a pattern target of $10,611.
However, if the
bulls can propel the price above the downtrend line, the bearish pattern
will be invalidated. Such a move could attract short covering by the
bears, resulting in a rally to $12,000.
The gradually upsloping 20-EMA and the RSI in the positive territory suggests a minor advantage to the bulls.
XLM/USD
Stellar Lumens (XLM)
broke below the 200-day simple moving average ($0.077) on Sep. 21 but
the bears could not capitalize on this move and sink the price below
$0.066841. This shows buying by the bulls at lower levels.
The
XLM/USD pair has formed an ascending channel and the bulls are
attempting to push the price above the overhead resistance at $0.084584.
Although the bears defended the overhead resistance on Oct. 17, the
bulls have not given up much ground.
If the pair stays above the
moving averages, the buyers will make one more attempt to drive the
price above $0.084584. If they succeed, the pair could start a new
uptrend that may rally to $0.10.
The gradually upsloping moving averages and the RSI in the positive zone suggest that the bulls have the upper hand.
The
pair had broken above the channel but the bulls could not clear the
hurdle at $0.084584. However, on the downside, the bears have not been
able to drag the price below the 38.2% Fibonacci retracement level of
$0.079239.
This suggests that the bulls will again try to thrust
the price above the overhead resistance. If they succeed, a rally to
$0.091042 will be on the cards.
Contrary to this assumption, if
the bears sink the price below the 20-EMA, a drop to $0.076546 is
possible. A break below this level could result in a decline to the
support line of the channel.
CRO/USD
The descending triangle completed on Oct. 14 when Crypto.com Coin (CRO) plummeted and closed (UTC time) below the $0.144743 support. This bearish setup has a target objective of $0.10607.
However,
the bulls might attempt to defend the 200-day SMA at $0.121. A bounce
off this level could retest the breakdown level at $0.144743. In a
downtrend, traders sell on rallies to the 20-day EMA ($0.144) as the
path of least resistance is to the downside.
Hence, if the CRO/USD
pair turns down from the 20-day EMA, it will suggest that the sentiment
is bearish. The sellers will then again try to sink the price below the
200-day SMA. If they succeed, the decline could extend to $0.10607.
The
20-day EMA is sloping down and the RSI has plummeted deep into the
oversold territory, which suggests that the advantage is with the bears.
However, a relief rally cannot be ruled out in the short-term.
The
RSI on the 4-hour chart has also plunged deep into the oversold
territory. This suggests panic selling and usually, after such a round
of such intense selling, a minor pullback occurs.
Any relief rally is likely to face selling at the 20-EMA as bears will try to consolidate their advantage.
This
bearish view will be invalidated if the pair rises and sustains above
the breakdown level of $0.144743. Until then, every rally is likely to
be viewed as a selling opportunity.
BNB/USD
Binance Coin (BNB)
turned down from $31.9798 on Oct. 16 but the bulls purchased the dip to
the immediate support at $29.5646. This suggests that the previous
resistance level has now flipped to support.
The
upsloping 20-day EMA ($29.06) and the RSI above 61 indicates that bulls
have the upper hand. The 200-day SMA ($19.95) has also started to turn
up, which suggests that the long-term trend is also tilting in favor of
the bulls.
If the buyers can thrust the BNB/USD pair above the
$32– $33.3888 resistance zone, the momentum could pick up and a retest
of the all-time highs will be on the cards.
Contrary to this assumption, if the bears sink and sustain the pair below the 20-day EMA, it will signal weakness.
The
bears are defending the $31–$32 zone aggressively. The flattened 20-EMA
and the RSI just above the midpoint suggests a balance between supply
and demand.
This balance will tilt in favor of the bears if they
can sink and sustain the price below $29.5646. If this support cracks, a
drop to $28 and then to $26 is possible.
Conversely, if the bulls propel the price above the overhead resistance zone, it will signal the resumption of the uptrend.
LTC/USD
Litecoin (LTC)
is attempting to form an inverse head and shoulders pattern that will
complete on a breakout and close (UTC time) above $51.50. The flat
moving averages and the RSI below the midpoint suggest a balance between
supply and demand.
However,
the long tails on the candlesticks on Oct. 2 and Oct.16 show that the
bulls are buying the dips to the trendline. If the bulls can push the
price above the moving averages, the LTC/USD pair could again rise to
$51.50.
A breakout and close (UTC time) above this level could start a new uptrend. The pattern target of the reversal setup is $61.50.
This
bullish view will be invalidated if the bears sink the pair below the
trendline. Such a move could keep the pair range-bound for a few more
days.
The
4-hour chart shows that the rebound off the trendline is struggling to
sustain above $47.7845. This suggests that buying dries up at higher
levels. The 20-EMA is sloping down and the RSI is in the negative zone.
Therefore,
the bears may take one more shot at breaking the trendline support. If
they manage to do that, the pair could drop to $42.
Conversely, if the bulls can sustain the price above $47.7845, a move to $50 and then to $51.50 is likely.
source link : https://cointelegraph.com/news/top-5-cryptocurrencies-to-watch-this-week-btc-xlm-cro-bnb-ltc
