Wall Street strategist Thomas Lee has formulated a new contrarian index, called the Bitcoin Misery Index, BMI, which can be helpful for traders. Lee is bullish on Bitcoin and has retained a year-end target of $25,000, which results in a gain of more than 160 percent from the current levels.
We believe it’s better to buy only after the cryptocurrencies stop falling because in a bear market people dump their holdings at ridiculous prices. So, let’s check if any of the digital currencies has formed a bottom.
BTC/USD
Bitcoin broke below the critical support of $9,500, yesterday, March 09, and hit an intraday low of $9,000.02, which is just below the 50 percent Fibonacci retracement of the recent pullback from $6,075.04 to $12,172.43.
The bulls bought the dip and pushed prices back above $9,500. The BTC/USD pair is still not out of the woods because it is still trading inside the descending channel.
If the bulls sustain above the $9,500 levels, a range bound action is likely to ensue where we can expect the bulls and the bears to battle it out between $9,500 and $12,200 levels.
On the contrary, if the bears again break below yesterday’s low of $9,000.02, the price might fall towards 61.8 percent of the $8,404 retracement level.
We would like to see clarity and a support level holding before suggesting any trades.
ETH/USD
Yesterday, Ethereum fell according to our expectation to $637.63, but currently, the bulls are attempting a pullback.
The ETH/USD pair is currently in a downtrend as the price is trading inside the descending channel and below both the moving averages. Any rebound from the current levels is likely to face selling pressure at one of these resistance zones.
It is bears’ advantage, until the bulls break out and sustain above these two overhead resistances.
BCH/USD
We have been expecting Bitcoin Cash to correct to $950 levels since our previous two analyses, but the bulls have held on to the $1,000 levels. On March 9, the price rebounded from $989.8418.
Within the next couple of days, if the bulls fail to sustain above $1,150, chances are that the bears will attempt to sink the BCH/USD pair towards the next support of $854.
We will change our bearish view once the cryptocurrency rallies above $1,400.
XRP/USD
We believe that Ripple is forming a large range. Yesterday, March 09, prices fell close to a lower end of the possible range.
On the downside, the level between $0.56270 and $0.695 is likely to act as strong support. This zone will hold unless there is news that might influence the market.
Traders can buy the dip in the XRP/USD pair towards the $0.60 levels. It is best to wait for prices to stabilize for four hours and then buy on the way up, rather than buy on the way down. The stops can be placed at $0.55.
The target is $1.22. This might turn out to be a roller coaster ride because trading inside the anticipated range will be volatile.
XLM/USD
Stellar has broken below the $0.32 critical support, but it has not slumped as we had expected.
Right now the bulls are defending the $0.3 levels, but any pullback will face resistance at $0.32 and the 20-day EMA.
If the bulls fail to sustain above $0.32, the XLM/USD pair can slide towards the lower end of the descending channel at $0.22
We should buy the cryptocurrency if it sustains above the $0.32 levels for a couple of days.
LTC/USD
Litecoin broke and closed below the descending triangle on March 08, but the bulls quickly pushed the price back above $185 on March 09.
In case the bulls fail to sustain above $185, chances are that the LTC/USD pair will fall to $160 and then to $140 levels. As both moving averages have flattened out, we might see range-bound trading for a few days. Once we get the levels of the range, we may attempt to trade it.
ADA/BTC
Cardano isn’t looking strong. For the past two days, it has sustained below 0.00002460. The next support lies way lower at 0.00001690.
At the moment, the bulls and the bears are in a state of equilibrium. The intraday ranges have shrunk for the past two days. We may see a few days of small ranges; after that, we expect a large range day. It is still difficult to forecast whether the large range day will be on the upside or the downside.
We remain bearish on the ADA/BTC pair as long as it trades below the downtrend line and the 20-day EMA.
NEO/USD
NEO has been under pressure from the bears, who are trying to break below the critical support zone of $86 to $93.
Yesterday, March 09, the NEO/USD pair fell to an intraday low of $78.92, but it closed above the support of $86.143. If the bulls fail to break above $93.5 levels, the bears will be back in action.
On the downside, the next support is the February 06 lows of $63.62. We may change our bearish view after the price sustains above the downtrend line.
EOS/USD
Yesterday, EOS fell below the $5.7917 critical level, but it recovered and ended the day above the support level. Nevertheless, if the bulls fail to carry prices towards the $8 levels, there might be a breakdown.
On the downside, the next support is only at $3.65 levels. However, if the bulls hold the $5.97 levels, the EOS/USD pair is likely to become range bound.
We might start trading in the range once we have confirmation that the $5.97 level is holding.