As Bitcoin price consolidates and searches for support, large cap altcoins are setting up for a resumption of their uptrends.
Blockstream CEO Adam Back recently said that institutional money is not needed to propel Bitcoin (BTC) to $300,000 within five years. This is partially because the current financial situation could drive retail traders to look for alternative investments to preserve the value of money in a time where there is a lot of money printing across the world. This is likely to create enough demand from retail traders to start the next mega bull run in the top-ranked cryptocurrency on CoinMarketCap.
A strong resistance level that has held on two or more occasions and resulted in a major reversal can be a tough nut to crack. Such resistances make the bulls nervous as they are not willing to risk their paper profits, hence, the short-term traders tend to book profits close to the resistance. On the other hand, aggressive traders use the stiff resistance levels to establish short positions with a stop-loss placed just above the resistance.
Daily cryptocurrency market performance. Source: Coin360
While short-term traders are fixated on whether BTC will break out of $10,000 or not, Michael Novogratz of Galaxy Digital believes that the unrest in the U.S. and the abysmal financial situation will soon send BTC above the key resistance level. Novogratz expects the momentum to pick up after Bitcoin sustains above $10,000, hence, he tweeted that traders should “get on the train.”
Bitcoin (BTC) broke out of the symmetrical triangle and surged to a high of $10,362.42 on June 1. However, the bulls could not sustain the momentum and scale the price above the critical resistance of $10,500.
BTC/USD daily chart. Source: Tradingview
This was the third occasion that the BTC/USD pair had turned down from close to $10,500 levels. The previous two incidents (marked as ellipses on the chart) had resulted in a sharp trend reversal.
However, on June 2, the bulls purchased the dip to the 20-day exponential moving average ($9,362), which is a huge positive. This suggests that the sentiment remains to buy the dips as traders anticipate higher levels in the future.
If the pair sustains above the 20-day EMA, the bulls will again try to push the price above the resistance line of the symmetrical triangle. Above this level, the final barrier will be $10,500. If the momentum can ascend this level, a new sustained uptrend is likely.
This bullish view will be invalidated if the pair turns down from the current levels and breaks below the 20-day EMA. In such a case, a drop to the support line of the triangle is likely. A breakdown of the triangle will be a huge negative that can drag the pair to $8,130.58. The only development in favor of the sellers is the bearish divergence on the relative strength index.
On June 2, Ether (ETH) reached a high of $253.556, just shy of $257, which was the target objective of a breakout of the inverse head and shoulders pattern. From there, the biggest altcoin plunged to $225.873.
ETH/USD daily chart. Source: Tradingview
The bulls purchased the dip to $227.097 on June 3, which is a positive sign. Currently, the bulls are again attempting to resume the uptrend. If the second-ranked cryptocurrency on CoinMarketCap rises above $253.556, a rally to the resistance of the ascending channel at $265 is possible.
A trend change will be signaled if the ETH/USD pair turns down from the current levels and plummets below the 20-day EMA ($219). If this support cracks, a fall to the 50-day simple moving average ($202) is possible.
On June 1, XRP closed (UTC time) above the overhead resistance of $0.20570. This was an indication that the bulls had overpowered the bears.
XRP/USD daily chart. Source: Tradingview
However, on June 2, the third-ranked cryptocurrency on CoinMarketCap was back below $0.20570. This suggests that buying dried up at higher levels.
Currently, the bulls are attempting to keep the price above the moving averages. If successful, the XRP/USD pair is likely to make another attempt to rally to the $0.23612–$0.24770 resistance zone.
Conversely, if the bears sink the price below the moving averages, the pair could correct to $0.19 and then to $0.17372. Traders who own long positions can continue to keep the stop-loss at $0.19. The stops can be trailed higher after the pair sustains above $0.215.
Bitcoin Cash (BCH) spiked above the immediate resistance of $255.46 on June 2 but the bulls could not sustain the higher levels. The altcoin turned around from $269.17 and plunged back into the $217.55–$255.46 range.
BCH/USD daily chart. Source: Tradingview
The fifth-ranked cryptocurrency on CoinMarketCap is currently attempting to bounce off the moving averages. If the bulls can again push the price above $255.46, it will increase the possibility of a rally to $280.47.
A breakout of $280.47 is likely to start a new uptrend that has a target objective of $350. Hence, traders can piggyback on this possible ride after the price closes (UTC time) above $280.47.
However, if the BCH/USD pair reverses direction from $255.46 and breaks below $236, it can correct to $217.55. A break below this support can drag the pair to $200.
Bitcoin SV (BSV) has been oscillating close to the $200 levels for the past few days. The flat moving averages and the RSI close to the midpoint suggests a balance between the bulls and the bears.
BSV/USD daily chart. Source: Tradingview
If the sixth-ranked cryptocurrency on CoinMarketCap breaks free and moves above $209, it could reach the top of the range at $227. A breakout of this level could start a new uptrend that can offer a buying opportunity to traders.
Conversely, if the BSV/USD pair turns down and slides below $187, a drop to $170 is possible. A break below this support could start a new downtrend. There is no reliable trading setup at the current levels.
Litecoin (LTC) reversed direction from $49.9445 on June 3, which suggests that the bears are aggressively defending the $50.7864–$52.2803 resistance zone. If bears sink the altcoin below the moving averages, it could drop to $39.
LTC/USD daily chart. Source: Tradingview
Nevertheless, if the seventh-ranked cryptocurrency on CoinMarketCap rebounds off the current levels, the bulls will make another attempt to scale above the overhead resistance zone.
If successful, the LTC/USD pair is likely to start a new uptrend that has a target objective of $64. Therefore, traders can watch for a buying opportunity on a close (UTC time) above $52.2803 with a stop-loss below $44.
Binance Coin (BNB) has been trading near the $18.1377 resistance for the past four days. This is a positive sign as it suggests that the bulls are not closing their positions aggressively at the resistance of the range.
BNB/USD daily chart. Source: Tradingview
This increases the possibility of a breakout of $18.1377. Both moving averages are gradually sloping up and the RSI is above the 50 levels, which suggests that bulls have a minor advantage.
If the price sustains above $18.1377, the eighth-ranked crypto-asset on CoinMarketCap could start a new uptrend that can offer a buying opportunity to the traders. Above $18.1377, a rally to $21.50 is possible.
However, if the BNB/USD pair fails to scale above $18.1377, the bears will attempt to sink it below $15.80. If successful, the pair can decline to $14.9586 and then to $13.65.
The bulls attempted to drive EOS above the $2.3314–$2.8319 range on June 2 but the markets quickly rejected the higher levels. The altcoin reversed direction and dipped back into the range.
EOS/USD daily chart. Source: Tradingview
The flat moving averages and the RSI close to the midpoint indicates a balance between supply and demand. This points to a few more days of consolidation.
The first indication of strength would be a close (UTC time) above $2.8319. If the ninth-ranked cryptocurrency on CoinMarketCap sustains above this level, the bulls will make another attempt to break out of $3.1104. If successful, it could start a new uptrend and offer a buying opportunity to the traders.
Conversely, if the pair breaks below $2.3314 it could start a new downtrend with a target objective of $1.5524.
Tezos (XTZ) made an outside day candlestick pattern on June 2. The altcoin broke out of the $2.963–$3.073 overhead resistance zone to hit a high of $3.1384 but it could not sustain the higher levels. It quickly turned around and broke below the 20-day EMA ($2.79).
XTZ/USD daily chart. Source: Tradingview
However, the positive thing is that the bulls bought the dips below the 20-day EMA indicating demand at lower levels. Currently, the 10th-ranked cryptocurrency on CoinMarketCap is back above the 20-day EMA and the bulls are trying to push it above $3.1384.
If successful, the uptrend is likely to resume. The target objective on the upside is $3.3367 and then $3.80. Traders can continue to hold their long positions with stops at $2.57. The stops can be trailed higher after the XTZ/USD pair sustains above $3.1384.
The bearish scenario will come into play if the pair turns down from the overhead resistance and breaks below $2.60. Below this level, a drop to $2.24 is possible.
The bulls have held Cardano (ADA) above the critical support at $0.0722 for the past three days. This is a positive sign as it shows that the bulls are buying on dips as they anticipate the uptrend to continue.
ADA/USD daily chart. Source: Tradingview
A breakout of the $0.0830–$0.0866 zone can carry the 11th-ranked cryptocurrency on CoinMarketCap to the target objective of $0.1–$0.10652.
This bullish view will be threatened if the bears sink and sustain the ADA/USD pair below $0.0722722. Below this support a drop to the 50-day SMA is possible.
Although the overbought reading on the RSI warrants caution, it does not signal a trend reversal until the price turns down and breaks the support at $0.0722722.
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.