The Federal Reserve Board Chairman Jerome Powell has said that the Fed is not developing a central bank digital currency (CBDC), but it is conducting its own research to evaluate the benefits and limitations of such an initiative.
On the other hand, Edith Cheung, partner at blockchain-focused venture capital fund Proof of Capital, believes that China will launch its digital currency within the next six to twelve months. A CBDC by a large economy will be an interesting development.
Daily cryptocurrency market performance. Source: Coin360
The crypto markets have been losing ground in the past few weeks due to the lack of a positive catalyst. The United States Securities and Exchange Commission announced that it will review its previous decision to reject the exchange-traded fund (ETF) filing from Bitwise Asset Management and NYSE Arca. Though this review does not guarantee approval, it is certainly a step in the right direction.
The majority of crypto investors are in the age group of 18 to 34. Lack of understanding of the technology has kept the people above the age of 50 away from crypto investing. Michael Novogratz’s crypto merchant bank Galaxy Digital plans to tap into this wealth among older investors by offering two Bitcoin (BTC) funds — Galaxy Bitcoin Fund and Galaxy Institutional Bitcoin Fund. These funds could bring a lot of fresh money into the crypto markets.
As the fundamentals continue to improve, we believe that dips should be viewed as a buying opportunity. However, it is best to wait for the price to stop falling and signal a turn around before entering long positions. Do the charts of the major cryptocurrencies signal a bottom or could the prices fall further? Let’s analyze the charts.
After holding close to $8,467.54 for three days, Bitcoin plummeted on Nov. 18. The fall has dragged the price to $8,000, which is psychological support. Just below this, at $7,952.84 is the 78.6% Fibonacci retracement level of the most recent rally. We anticipate a strong defense of this support by the bulls.
BTC USD daily chart. Source: Tradingview
Though the price has not breached the $8,000 mark, the bulls have failed to achieve a strong rebound. This shows that the bulls are cautious at these levels. If the price fails to scale above the moving averages within the next few days, we anticipate the bears to make another attempt to sink the price below the $7,702.87 to $7,337.78 support zone. If this zone gives way, the BTC/USD pair might nosedive to $5,500. Such a move will be a huge negative but we give it a low probability of occurring.
We will wait for the price to climb above the $8,777.89 to $9,080 overhead resistance before turning positive.
Ether (ETH) has gradually dipped to the first support at $173.841. If this support fails to hold, the correction can deepen to $161.056 and below it to $151.829. A breakdown of $151.829 will resume the downtrend.
ETH USD daily chart. Source: Tradingview
Conversely, if the price rebounds off $173.841, a few days of range-bound action between $173.841 and $197.75 is likely.
While most other cryptocurrencies are struggling to hold their support levels, the ETH/USD pair has not given up much ground. Hence, during the next up move, the pair is likely to be at the front of the rally. Therefore, we are not recommending traders to close their long positions yet. They can protect their positions with stops at $150.
XRP dipped below $0.24 on Nov. 18, which triggered our suggested stop loss on the long positions. The bulls are currently attempting to defend the support at $0.24508. However, the downsloping 20-day EMA and the RSI close to the oversold territory indicates that bears have the upper hand.
XRP USD daily chart. Source: Tradingview
If the bears sink the price below $0.024508, a retest of the yearly low at $0.22 will be on the cards. A break below this level will be a huge negative as it will resume the downtrend.
Contrary to our assumption, if the XRP/USD pair rebounds off the current levels, the bulls will try to keep it range-bound between $0.24508 and $0.31491 for the next few days. We will wait for a new buy setup to form before turning positive.
Bitcoin Cash (BCH) plunged below the 50-day SMA on Nov. 18 and is currently threatening to break below the critical support at $241.85. If this support breaks down, a retest of $203.36 is possible. The 20-day EMA has started to turn down and the RSI has dipped into the negative zone, which shows that bears are in command.
BTC USD daily chart. Source: Tradingview
Contrary to our assumption, if the price turns around from the current levels, the bulls will attempt to push it above the 20-day EMA. If successful, a move to $306.78 is likely. We will wait for the decline to end and the price to form a reliable buy pattern before recommending taking a long position.
The tight consolidation in Litecoin (LTC) resolved to the downside on Nov. 18, with a break below the 50-day SMA. The next support on the downside is $50 and below it $47.1851. If this support zone cracks, the downtrend will resume. Therefore, traders can protect their long positions with stops at $47.
LTC USD daily chart. Source: Tradingview
If the bulls defend the support at $50, the LTC/USD pair will extend its stay inside the $50 to $62.0764 range for a few more days. The pair will pick up momentum on a breakout of $66.1486.
The bulls have held the support at $2.9980 for the past two days but have failed to achieve a strong bounce off it. This shows a lack of aggressive buying at the support level. Unless the price quickly rebounds off the current levels, EOS could slip below the support at $2.9980. Below this support, a retest of $2.4001 is possible.
EOS USD daily chart. Source: Tradingview
Conversely, if the EOS/USD pair rebounds off $2.9980, it might remain range-bound between $2.9980 and $3.69 for a few days. The pair will pick up momentum on a break above $3.69.
The bears have made a strong comeback in Binance Coin (BNB). The price has plunged below both the moving averages and is currently challenging the support at $18.30. This is an important level to watch out for because the uptrend line is also located close by. A break below this level can sink the price to $16.50.
The 20-day EMA has started to slope down and the RSI has dropped into the negative territory, which shows that bears have the edge.
BNB USD daily chart. Source: Tradingview
However, if the bulls defend the support at $18.30, the BNB/USD pair might consolidate between $18.30 and $21.2378 for a few more days. The pair will pick up momentum above $21.80. Traders can retain the stop loss on the long positions at $16.
Bitcoin SV (BSV) broke below the descending channel on Nov. 19 and is currently threatening to break below the critical support at $107. If this level cracks, the next support is at $92.693.
BSV USD daily chart. Source: Tradingview
The 20-day EMA has turned down and the RSI has dipped close to the oversold zone, which shows that bears are in the driver’s seat.
Our negative view will be invalidated if the bulls defend the support at $107. This will be a positive sign as it will indicate demand at lower levels. A bounce off $107 can carry the price to $155.380. We will wait for a new buy setup to form before turning positive.
Stellar (XLM) is looking weak as the bulls have failed to defend the 50-day SMA. There is minor support at $0.062122 below which a drop to $0.0560 is possible. The 20-day EMA has started to slope down and the RSI has dipped into the negative territory, which shows that bears have the upper hand.
XLM USD daily chart. Source: Tradingview
Contrary to our assumption, if the XLM/USD pair bounces off $0.062122, it will indicate that bulls are using the dips to accumulate. The recovery attempt will face resistance at the moving averages, above which a move to $0.088708 is possible. We do not find a reliable buy setup at the current levels, hence, we are not suggesting taking a position at this time.
Tron (TRX) has broken below the 50-day SMA. It is currently falling inside a descending channel. The 20-day EMA has started to turn down and the RSI has dipped back into the negative zone, which suggests that bears are in command.
TRX USD daily chart. Source: Tradingview
The TRX/USD pair can now dip to the support line of the descending channel, which is close to the horizontal support at $0.0157773. If this support holds, the pair will extend its stay inside the channel.
However, if the bears sink the price below the channel, the down move will pick up momentum. The next support on the downside is $0.0136655 and below it is $0.0116262. We will wait for the price to break out and sustain above the channel before turning positive.
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.
Market data is provided by HitBTC exchange.