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The market data is provided by the HitBTC exchange.
The crypto markets tumbled on Sunday following the news of hacking of a small South Korean exchange, Coinrail, according to top tier media. The reaction to the news seems to be a little exaggerated because the 24-hour volume traded at Coinrail is only about $2.65 million.
While the hackers stole about $40 million of tokens, the panic selling wiped off about $42 billion in total crypto market capitalization over the weekend. In a bear market, even small piece adverse news creates panic among the traders. This is what was seen on Sunday.
Bottoms are formed during such periods of a selling stampede. The weak hands close their positions while the stronger hands who have sold at the highs use the opportunity to buy at lower levels.
Long-term investors can use these sharp falls to build their position. However, traders should not be in a hurry to establish fresh positions when the markets are in a firm bear grip. So, when should one start buying? Let’s find out from the charts.
The bounce in Bitcoin that started on May 29 failed to break out of the 20-day EMA. This led to fresh shorting by the bears. Once price broke below the support levels, the bulls were forced to liquidate their long positions. Selling increased when the digital currency broke below the critical support level of $7,100.
The support zone between $6,700-$6,900 is also not finding any buyers, which increases the possibility of a drop to the next support at $6,075.04.
The only thing that is in favor of the bulls is the RSI. Historically, the BTC/USD pair has offered a strong tradeable bounce from the oversold levels on the RSI. With any more fall, the RSI will enter deep into the oversold territory. If history repeats itself, the virtual currency should get a strong bounce.
Any recovery will face a strong selling at the 20-day EMA and the small trendline. We shall wait for the decline to end before recommending long positions.
Though Ethereum held above the resistance line of the descending channel on June 09, it did not climb to our buy levels at $630. On June 10, it re-entered the channel and slumped to $496.27, close to the May 28 lows of $492.5.
If the bulls fail to hold the immediate support levels at $492.5, the ETH/USD pair can plummet to the support line of the descending channel at $400.
Both the moving averages are turning down, and the RSI is also in the negative territory, which is a bearish sign. Any pullback attempts by the bulls will face stiff resistance at $550 and at the 20-day EMA.
Our bearish view will be invalidated if the cryptocurrency holds $492.5 and bounces above $630. Traders should wait for a new buy setup to form before initiating any long positions.
Though the bulls held the 20-day EMA for seven days, they could not push Ripple higher. On June 10, prices broke below the 20-day EMA and tumbled to the critical support at $0.56270.
If the bulls fail to defend the critical support zone between $0.45351-$0.56270, the bearish descending triangle formation will complete, which will be a negative development.
The next support for the XRP/USD pair is way lower at $0.24. Any pullback attempts will face resistance at the 20-day EMA. As the outlook is bearish, we are not suggesting any trade on it.
The tight range in Bitcoin Cash resolved on the downside. The failure of the bulls to break out of the 20-day EMA is a negative sign. There is minor support at $878 below which the decline can extend to $777 levels.
The 20-day EMA has turned down, and the 50-day SMA is also showing weakness. This shows that the bears are in control in the short-term. Any pullback attempt will face strong selling pressure at the 20-day EMA.
We shall wait for the BCH/USD pair to form a new buy setup before recommending any trade on it.
EOS broke below our stop loss at $12.5 and plummeted to $10 levels. Selling gathered momentum once it broke below the critical support level of $12.9870. The bulls are likely to attempt to hold the $10 levels. If successful, the virtual currency might spend the next few days in the range of $10-$13.
However, if the bears continue to mount pressure and break below the $10 levels, the EOS/USD pair will become negative and can fall to $8 levels. The support at $9.6136 is unlikely to hold.
Traders should wait for a new buy setup to form before initiating any long positions.
Litecoin has continued to fall and has reached the major support level of $107. If the bears break and close (UTC) below the support, it will complete the bearish descending triangle formation. Though the pattern targets are way lower, the next support on the downside is at $84 and at $75.
This is the third time that the LTC/USD pair has declined to the $107 levels since early-February of this year. We anticipate strong defense of this level by the bulls, but we shall not propose any long positions until we notice signs of a sustainable bounce.
The traders should play it safe and remain on the sidelines.
We believe that Cardano is trading in a large range between $0.13-$0.436956. The failure to break out of the 20-day EMA has resulted in a fall to $0.17. This is minor support, but we expect this to be broken.
The ADA/USD pair has declined from close to the top of the range on May 03 to the current levels, which is a fall of about 58 percent. Due to the strong selling pressure, the RSI has dropped close to the oversold levels.
We believe that the bottom of the range at $0.13 will attract strong buying by the bulls. The traders should watch for buying to resume near the lows before establishing long positions.
Both the moving averages are sloping down, and the RSI is also in the negative territory. This increases the probability of the decline to extend to $0.184 levels.
Between March 18-April 12, repeated attempts by the bears to break down below $0.184 levels had failed. Hence, we expect the buyers to defend the $0.184 levels once again. The traders can wait for the dip to buy the XLM/USD pair closer to the supports.
IOTA broke below the critical support level of $1.63 on June 10 and dropped to its next support at $1.33 on the same day. Though some buying is seen at the $1.63 levels, the chart formation remains weak. The 20-day EMA has turned down, and the 50-day SMA is also showing signs of weakness. The RSI has also fallen into the negative territory.
Once the $1.33 levels break, the next major support is at $0.9150 where we anticipate strong buying to emerge.
Our bearish view will be invalidated if the IOTA/USD pair sustains above $1.63 levels. We believe that the traders should wait for a couple of days before buying this dip.