The market data is provided by the HitBTC exchange.
The Barclay Cryptocurrency Traders Index monitors the returns of the 19 funds that trade in virtual currencies. It has taken a beating this year and is down 43.1 percent year to date.
However, funds that are market makers and who trade in arbitrage strategies are having a field day, as some have gained 30 percent in the first quarter.
This shows that whatever the market condition, the traders can always develop a strategy to profit from it.
The miners are not that lucky. According to Morgan Stanley, the miners of Bitcoin will remain unprofitable if prices remain below $8,600.
The big problem is that no one knows how to evaluate the leading cryptocurrency. The targets range from $100 to $100,000 and higher, but when prices don’t fall even during bad news, it is usually a sign that the bottom is around the corner. We believe that most digital currencies have bottomed out, at least in the short-term.
BTC/USD
Bitcoin has finally broken out of the 50-day SMA after remaining range-bound for seven days. Though this is a bullish sign, we still don’t see a strong buying conviction, as the up move is lacking momentum. This shows that the market participants are cautious of this rally.
The next target on the upside is $9,400, where we suggest booking partial profits. Once this level is crossed, a move to $10,000 is possible.
If prices fail to hold above the 50-day SMA, it will be a bearish sign and prices can fall back to the first support level of $7,900. Therefore, we suggest the traders should keep the stops on the BTC/USD pair at breakeven.
Though the 50-day SMA is still falling, the 20-day EMA has turned up. A bullish crossover will provide further strength to the ETH/USD pair.
Though we are bullish, we have not suggested any trade on Ethereum. We will wait for a dip or a consolidation to enter fresh long positions.
BCH/USD
In our previous analysis, we had noticed that Bitcoin Cash doesn’t face resistance at the 50-day SMA and that is what happened. The price zoomed past the moving average on April 19 and touched our first target objective of $1,114.
Traders can book partial profits at the current levels and keep a trailing stop on the remaining position. If the bullish sentiment continues, the BCH/USD pair can rally to $1,300 and then to $1,600.
However, we need to caution the traders that the cryptocurrency has a history of vertical falls, so it’s better to protect the paper profits with a close stop loss.
We should never allow a profitable position to turn into a loss.
XRP/USD
We had recommended long positions in Ripple in our previous analysis. The digital currency easily crossed above our first target objective of $0.83 where we had proposed to book partial profits.
There is a minor resistance at $0.9, above which, the XRP/USD pair can rally to $1.08 levels. We like the way it has rallied over the past three days, which shows that the buyers are back. The moving averages are also close to a bullish crossover, which is another positive.
Traders can hold the remaining positions with a close stop loss.