The news of Facebook relaxing its ban on cryptocurrency advertisements has failed to cheer the crypto markets. This shows that the market participants continue to focus on the negative news while disregarding the positive news.
A study by the research firm Ipsos, conducted for ING Bank B.V found that only 9 percent of the respondents from Europe, Australia and the U.S. own cryptocurrencies. 25 percent said they might buy in the future. The negative sentiment is keeping these new first-time investors at bay who are postponing their purchases.
Blockchain venture capitalist Spencer Bogart believes that there is more pain left in the system. He expects some more selling because the hedge funds that had opened about a year ago are likely to face redemptions in near future.
So, how low can the digital currencies fall? Let’s check the charts.
Though Bitcoin has been trading above the $6,075 levels for the past two days, the failure of the bulls to ensure a strong bounce at this critical support shows weakness. This indicates that the buyers are still not willing to put fresh money at these levels.
The bears will now attempt to break below $6,000 once again. If successful, the digital currency can slide to $5,450 and below that to $5,000.
If the bulls hold the $6,000 mark, a pullback to the downtrend line is likely. The BTC/USD pair will gain strength above the 20-day EMA.
The positive divergence on the RSI also points to a relief rally. However, when the sentiment is downbeat, trades should not be taken on the basis of positive divergences alone, unless price also confirms it.
We suggest long positions at $6,900 with a stop below the recent lows. The target objectives on the upside are $7,700 and $8,500.
This is a risky trade as our initial stop loss is large. Hence, please keep the allocation size at 40 percent of usual. We shall add to the position once we get a confirmation that a bottom is in place.
Ethereum has convincingly broken below the support at $450. It can now slide to the next support level at $358.
The ETH/USD pair will show signs of a change in trend if it breaks out and closes above the downtrend line and the 20-day EMA.
We suggest waiting for at least two positive closes above the 20-day EMA before attempting any long positions. The resistances on the upside are at $550 and $628.
Ripple is struggling to stay above the critical support level at $0.45351. A breakdown from this level can extend the fall to $0.24.
Any attempt to pull back from the current levels will face a stiff resistance at the 20-day EMA, the downtrend line 1 and at $0.56270.
We recommend waiting for a close above $0.56270 before initiating any long positions. The upside target is $0.70. The XRP/USD pair will pick up momentum once it breaks out of the downtrend line of the descending triangle.
Bitcoin Cash broke down and closed below the critical support at $736.0137 on June 26. It can now slide to the next support at $619.7510 if the bulls fail to defend the $683 levels.
Any attempt to pull back will face a stiff resistance at $736.0137 and at the downtrend line. A close (UTC time frame) above $800 increases the probability of a rally to $934 and above that to $1200.
Historically, the 20-day EMA has proven to be a strong resistance. Hence, we shall wait until the BCH/USD pair scales above this level before recommending any long positions.
The bulls have been trying to hold the $75 line for the past three days. The RSI is deeply oversold; hence, we believe that Litecoin will pull back to the downtrend line.
If the bulls break out of the downtrend line and the 20-day EMA, a pullback to the $107.102 is likely.
If the LTC/USD pair fails to break out of the downtrend line, the probability of a breakdown towards the next support at $67 increase.
We shall wait for a new buy setup to form before proposing any bullish trades.