Price Analysis
Bitcoin (BTC) futures volumes have been consistently rising in the past few days. This shows that the interest of the institutional players has been gradually picking up.
A close study of the futures volume and price action can provide the experienced trader an insight into the likely direction of the markets. Increasing volumes with a sharp dip in price is a bearish sign as it indicates the initiation of short positions.
However, at times, a market that has been heavily shorted also provides an opportunity to enter a counter-trend trade because if the price does not fall, the traders are forced to cover their short positions, resulting in a short squeeze.
Though Bitcoin has been one of the worst performers in the past seven days, analysts remain bullish on its long-term prospects. Bobby Lee, co-founder of Chinese cryptocurrency exchange BTCC believes that the market capitalization of Bitcoin will overtake that of gold by 2028. He expects the decreasing supply of Bitcoin and money printing to boost prices past $500,000.
Tunisia becomes the first country to launch a Central Bank Digital Currency (CBDC). The Central Bank of Tunisia will digitize the Tunisian dinar, which will be issued on the Universa Blockchain. Gradually, other nations are also likely to follow suit in launching their own CBDC’s.
The fundamentals of the crypto sector continue to improve but the price is yet to catch up. Do the technicals of the top performers of the past week suggest the start of a new uptrend? Let’s find out.
XTZ/USD
Tezos (XTZ) has been the best performer of the past seven days, rising about 43% during the period. It received a boost on the news of its listing on the crypto exchange OKEx.
Another positive news was that Coinbase introduced staking rewards for all Tezos holders, enabling them to earn about 5% annually. After the recent rally, is it a good time to book profits or can the move up extend further?
The bulls have held the support at $0.829651 for the past few months. This indicates that buyers have been eyeing dips down to this support level to accumulate. The XTZ/USD pair has surged this week and has risen above both moving averages. It can now move up to $1.85. The pair has been pushed back down from this resistance on two previous occasions, hence, a breakout would be a significant event.
On a close above $1.85, a rally to $2.87 and above it to $3.37 is likely. Therefore, traders can buy on dips close to $1.1 levels. Our bullish view will be invalidated if the price turns down and slips below the recent low of $0.75.
ATOM/USD
Cosmos (ATOM) has been gradually moving higher for the past few days. It has risen by about 24% in the past seven days and is the second-best performer. Can it continue its up move or has it run its course? Let’s analyze its chart.
The ATOM/USD pair has found support close to $2 levels thrice in the past few months. This shows that bulls have been buying on dips to the support levels. With the rally this week, the price has scaled above the overhead resistance at $3.6043, thus completing a triple bottom formation.
It now has a minimum target objective of $5.2985. If the bulls push the price above this level, a rise to $7 is possible. Therefore, traders can buy on a close (UTC time) above $3.6043 and keep a stop loss of $2.90. Contrary to our assumption, if the price turns around from the current levels and plummets below $3.6043, it will suggest a lack of demand at higher levels.
XLM/USD
Stellar (XLM) surged on the news that the Stellar Development Foundation (SDF) had burned over 55 billion of the 85 billion tokens that were set aside for SDF operations, giveaway programs and partnership programs.
The foundation said that the burning was done because it wanted to be leaner and more efficient. After its 12% rally, can it rise further in the next few days or will the price dip due to profit booking? Let’s study the chart.
The XLM/USD pair is facing selling at the overhead resistance of $0.088708. With the rally this week, the price has risen above the previous low of $0.072545. This shows that the markets have rejected the lower levels. Both moving averages are flattening out and the RSI has risen to just below 50 levels, which shows that the sellers are losing their grip.
If the bulls can defend the support at $0.072545 during the next dip, it will be a positive sign. On the upside, the pair will pick up momentum on a breakout of $0.088708 and the 50-week SMA. Above the 50-day SMA, a rally to $0.145 will be on the cards.
Therefore, traders can initiate long positions on a close (UTC time) above the 50-week SMA and keep a stop loss of $0.067. Our bullish view will be negated if the price turns down from $0.088708 and sustains below $0.072545.
LTC/USD
Litecoin (LTC) has been attempting to form a bottom in the past few days. It extended its up move with an 8% rally in the past seven days. What are the critical levels to watch out for and when does it start a new uptrend?
The LTC/USD pair has broken out of the downtrend line and is attempting a recovery. If it sustains above $62.0764, it will suggest that the lower levels are attracting buyers. There is a minor resistance at the moving averages above which a move to $80.2731 will be on the cards. The flattening moving averages and the RSI moving up slowly suggests that the bulls are making a comeback.
Though positive, we do not find a reliable buy setup at the current levels, hence, we are not recommending to trade it. Our bullish view will be invalidated if the pair turns down and plunges below the recent lows of $47.1851.
EOS/USD
EOS rounded up the top five crypto performers of the past seven days with a rally of about 8%. There have been complaints of congestion in the network but it has not affected its price. Has it bottomed out? Let’s find out.
The EOS/USD pair has risen close to the moving averages, which are likely to act as minor resistance. If the bulls can push the price above this resistance, a move to $4.8719 is likely. The flattening moving averages and RSI just below the center indicate that the selling pressure has reduced.
Contrary to our assumption, if the pair turns down from the moving averages and plummets below the recent lows of $2.4001, it can retest the yearly low. However, we give it a low probability of occurring. We do not find a trade setup that offers a good risk to reward ratio at the current levels, hence, we are not recommending taking a long position in it.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.
The market data is provided by the HitBTC exchange.