Price Analysis of Bitcoin (BTC) and other Virtual Currencies

Mark Yusko, Morgan Creek Capital CEO believes that the Bitcoin (BTC) should be a part of every investment portfolio. The past five years of performance analysis of Bitcoin shows that even portfolios that only held 1% of their total investments in Bitcoin, managed to outperform their competitors. If look at the past history of Bitcoin, it offers a ten-to-one downside capture that makes it one of the most asymmetric assets that Yusko has ever seen.

The growing popularity of crypto derivatives indicates institutional players are gradually entering the space. The Chicago Mercantile Exchange group Managing Director and Global Head of Equity Index Alternative Investment Products, Tim McCourt, said: “CME Bitcoin futures have surpassed $100 billion in total notional value traded since their launch in December 2017.”

 

Bank of Japan deputy governor Masayoshi Amamiya said in a seminar that the central bank should be ready to issue a central bank digital currency if the public demand for it increases. This shows that several major economies are exploring the possibility of launching a CBDC.

The multiple cryptocurrencies have surged sharply at the end of January, but can the bulls sustain the momentum? Let’s study the charts.

BTC/USD

Bitcoin (BTC) has turned down from the minor resistance at $9,600. However, with the 20-day EMA sloping up and the RSI in positive zone, the advantage is with the bulls. We anticipate the bulls to defend the dip to the 20-day EMA at $8,736, which is just below the 200-day SMA at $8,881.

 

That is just below the 200-day SMA at $175, there is a strong support at $173.841. If that support breaks, then we expect the bulls to defend 20-day EMA at $166. If the price bounces off either of these support levels, then the bulls will make another attempt to move up to $197.75.

In case of bears, the price decline below the 20 day EMA, then the next support to watch out for is the $157.50 to $150 zone. A fall-off below this zone will be a huge negative and traders can trail the stops on long positions to $160.

BCH/USD

On Jan. 30, BCH came very close to the overhead resistance at $403.88, but the recent bulls have not even been able to scale above that level and the BCH price has once again turned down from that rise.

 

It’s been obvious that there is a strong support at $360 but if the bears sink the BCH price below that support level then a decline to 20-day EMA at $335 is most likely. We do expect the bulls to defend a 20-day EMA aggressively but, if the price rebounds off $360 or the 20-day EMA, then it will increase the possibility of a breakout of $403.88.

 

Opposite to above situation, if the bears drag the BCH price below the 20-day EMA, then a drop to $306.78 is possible.  BCH/USD pair might consolidate for a few days, if that support persists, then it will turn negative on a break below $296.13, but the negative divergence on RSI warrants caution.

XRP/USD

 

The recent bulls are struggling to sustain the XRP above $0.2326. And it seems to be a negative sign, as it shows a lack of buyers at the higher levels. In XRP/USD pair we anticipate the bulls to defend this support zone very aggressively.

 

If XRP/USD price rebounds off the support zone, then the bulls will make another attempt to scale above the resistance level at $0.25401. If that goes successful, then a move to $0.31503 is possible.

If things goes opposite, then the XRP/USD price will breaks below the neckline with a decline to $0.20041 is possible. Then the pair XRP/USD is struggling to move up, then in that case, we suggest traders squeeze their risk by trailing the stops on long positions to $0.21.

BSV/USD

At present, Bitcoin SV is at support line of the symmetrical triangle and in case the bears sink and sustain the price below the triangle, then it will be a huge negative impact. Then that pattern of BSV/USD has a target objective of $159.52 on the downside.

 

 

Despite of that, we can anticipate that bulls can attempt to stall that decline at $236 for BSV/USD pair. If successful, then the pair of BSV/USD will continue to consolidate between $337.8 and $236 for a few more days, and it will turn positive above $337.80.

EOS/USD

Now comes the EOS/USD pair, it broke above the overhead resistance of $4.24 on Jan. 30 that was a huge positive. But the bulls could not able to retain the breakout and the price has again dipped back below $4.24. That also suggests profit booking at the higher levels.

 

The EOS/USD pair can now decline to 20-day EMA at $3.68 that is likely to act as a strong support for it, but if the EOS/USD price rebounds off the 20-day EMA, then the bulls will once again attempt to elevate the pair above $4.24.

But as we have spotted on the RSI, a developing sign of negative divergence. Then if the bears slips the price below the 20-day EMA, then a fall-off to the 200-day SMA at $3.3 is possible.

 

On Jan. 30, LTC/USD price broke above the overhead resistance at $66.1486 that has completed a cup and handle pattern. If that bullish setup has a target objective of $96.439. Then the 20-day EMA is sloping up and the RSI seems to be in the overbought zone suggesting that the bulls have the upper hand.

 

 

The effect of bears to sink the price of LTC/USD back below $66.1486,  if succeeded then the price can dip to the 200-day SMA at $61.73 and below it to the 20-day EMA at $57.50. But if the price rebounds off the 20-day EMA, then the  bulls will once again attempt to push the LTC/USD pair above $70.50.

 

But if the price of the pair breaks below the 20-day EMA, a decline to $50 is possible. If LTC/USD price sustains below the $66.1486, then it will invalidate all bullish setup. Therefore, we have to wait and watch for a couple of days on this, before suggesting a trade in it.

ADA/USD

On ADA/USD pair, the bulls are struggling to scale above  overhead resistance at $0.0560221. All that shows a lack of buyers at higher levels. The Cardano (ADA) can now slip to the next support at $0.0461161. Then the 20-day EMA is also placed close to this level, so we expect the bulls to defend it aggressively.

 

If the ADA/USD pair price bounces off $0.0461161, then the bulls will again attempt to push the price above $0.0560221. If bulls are successful then a rally to $0.0652290 is most likely.

This pair has not able to break the level above $0.0560221. But if it succeeded then partial profits can be taken at current levels, otherwise stops on remaining long positions, can be kept at the breakeven level.

 

ETC/USD

 

The price of Ethereum Classic (ETC) has turned down from $12.87278. The altcoin can now retest the breakout level of $10, as suggested in our previous analysis. If the price bounces off $10, it might offer a low-risk buying opportunity.

 

 

However, if the retest of $10 fails to hold, the pullback can extend to the 20-day EMA at $9.15. We expect the bulls to defend the 20-day EMA aggressively. A bounce off this level or from $10 will increase the possibility of a move to $14.

 

Oppositely, if the bears sink the price below the 20-day EMA, a drop to $7.7853 is possible. The developing negative divergence on the RSI is a bearish sign. Hence, traders should wait for the uptrend to resume before initiating long positions once again.