Last trading week was tough for all of the financial assets including cryptocurrencies. After a strong bullish rebound from bottom ranges, most of the coins suffered from a heavy selling pressure on Friday’s volatile trading session. However, the past weekend brought a tight consolidation ranges with a more bullish bias. Monday started with strong upwards momentum, increasing 7-days gains for most popular cryptocurrencies. Leading gainers were Bitcoin Cash (+153.94% weekly change), Etherium (+70.64%), EOS (+53.53%) and Ripple (+46.07%). Such an optimistic performance was coming together with the overall trading volume spike. The most heavy-volume asset was traditionally Bitcoin with $73.99 billion (29.53% of the total volume), adding 28.94% to its value. Tether is surprisingly the second coin with $6.19 billion traded throughout last 24-hours. Etherium, EOS and Ripple are among the leaders in the scope of turnover. The upcoming trading week is going to be less volatile due to the Christmas holidays in Western developed countries, although a spike of the bullish run during the Asian trading session points to additional demand for cryptocurrencies. A further strength is seen with major coins approaching crucial technical levels in order to finalize the reversal bullish pattern. Breakthroughs and whipsaw are possible though.
Bitcoin bulls managed to lift the price above several important intraday resistances on the H4 chart below. So, the simple moving averages with 144 (green) and 233 (blue) periods have been breached. Moreover, BTC/USD charted the classic come back to the breached resistance which should work now as the support. Another important indication of the bullish breakthrough is the descending trendline which used to hold prices from upwards achievements during the sell-off in December. The fact that Relative Strength Index is still below its overbought levels points to further bullish strength still on cards. We suggest BTC/USD to keep appreciating towards the next horizontal static resistance which is currently placed at $5014.3, taking into the account $5000 round-figure psychological attractive price for upcoming days. If breached, more bullish achievements might take place. The buy-and-hold trading strategy is applied with an additional volume to be added on bearish whipsaws which are less likely though.
Our mid-term target of $168.70 hasn’t been achieved yet, despite rather fast bullish run charted by Etherium. The bullish divergence has been seen on MACD slow trend indicator with the same confirmation signal from the Relative Strength Index (see the H4 chart below). Higher lows on both technical indicators were contravening the lower lows of the price and such a strong buy-signal could not be ignored by crypto traders. ETH/USD gained more than $60 (70%) since last Monday with more strength on the table, despite RSI oscillator pointing to overbought conditions and MACD lines far above zero levels. Any dips should be used as a perfect buying opportunity, given the overall strength of the cryptocurrency market and the fact that Etherium has been extremely oversold during the early December plunge. Normal average-weighted price would be considered around $225, the top of the market on November 7. That’s just a short-term target, as if things come back to normal, ETH/USD should return to $500 at least in the long-term perspective. Buy and hold.
Bitcoin Cash was testing a strong resistance level during the time of writing this outlook. Fibonacci retracement points to 23.6% level of the plunge since November 7, which is placed at $204.4 on the daily timeframe. Once close daily price will clearly break that resistance, we might shift the bullish target up to $285.1 (38.2% FIbo). However, there is a certain doubt for such an optimistic scenario as Williams %R oscillator points to the fact that the latest bullish run is getting exhausted and the overbought territory is reached. We might observe a consolidation range in the nearest days with bearish retracement towards $171.7 level, which should be used as a buying opportunity. Additional intraday signals have to be monitored before entering the market with oscillators’ middle line (50%) as the mark dividing retracement from reversal.
Ripple managed to bounce back to the technical levels seen on November 21 around $0.4475. Here comes a significant upper range of the Ichimoku Cloud trend indicator, which divides the uncertainty area inside the span from the bullish open territory for next resistance levels. Although XRP/USD went a long path between the local bottom and the cloud, the reversal pattern is not still completed on the daily timeframe. Ichimoku cloud is still bearish and its lines are below the span. Two conditions are needed for the bulls to proceed: the price must get out of the span with daily close and all of the lines must cross each other to appear in the correct order. Bearish bounces are possible down to support levels around $0.38. Next scenario will depend on the momentum and the speed of potential consolidation. The overall picture is more optimistic though than it would have been. Therefore, traders should consider buying Ripple in a long-term perspective.
Litecoin started the previous trading week with the bullish breakthrough of the Bollinger Bands trend indicator on the H4 timeframe, which signalled a reversal pattern, exactly as we suggested. LTC/USD was gaining strength all of the past trading weeks, with several tight retracements which have been supported by BB middle line. Moreover, the latest development confirms the bullish continuation pattern and we are targeting $43.45, the highest price on November 15, for traders who still hold longs. Those traders who missed such an opportunity to join the party could consider buying Litecoin right from the current levels, counting on breakthrough acceleration aggressively. The more conservative approach assumes a retracement scenario before pulling the trigger. A range of $32.50/33.70 might be attractive in that case, however, additional intraday signals will be needed to make sure the correction is deep enough. The long-term outlook is bullish as well.