Price analysis: what caused BTC, ETH, XRP, LINK, BCH, LTC, BNB spikes

0

Data shows that Bitcoin’s (BTC) current rally is supported by greater participation from retail and institutional investors. The CME Bitcoin futures open interest has moved closer to the previous all-time high, a sign that institutional investors are becoming more interested in cryptocurrencies. Similarly, Bitcoin’s spot volume has hit a new 52-week high, according to data from Arcane research.

However, during strong uptrends, traders tend to get greedy and take on excessive leverage. Hence, large open interest on derivatives could act as a double-edged sword because even a small decline in Bitcoin could force the highly leveraged traders to close their positions. Such a move could have a cascading effect that could lead to long liquidation.

Daily cryptocurrency market performance. Source: Coin360

While traders should be cautious, there is no need to panic as yet because the current up-move in Bitcoin has happened without any euphoria or frenzy, especially among retail traders.

Moreover, several analysts have been skeptical of the rally, which is another positive sign. The top usually forms when the last bear in the market turns bullish and there is no one left to buy.

This does not mean that there will be no corrections along the way. Pullbacks are necessary to periodically shake out the weak hands and this generally improves the longevity of the trend.

Let’s analyze the top-10 cryptocurrencies to ascertain whether the uptrend will continue or is a correction around the corner.

DELIVERED EVERY MONDAY
Subscribe to the Markets Outlook newsletter
By subscribing, you agree to our Terms of Services and Privacy Policy

BTC/USD

The bulls pushed Bitcoin (BTC) above the $16,000 overhead resistance on Nov. 12. This breakout started the next leg of the uptrend that may carry the price to the critical overhead resistance at $17,200.

BTC/USD daily chart. Source: TradingView

The upsloping moving averages and the relative strength index in the overbought territory suggest that the bulls are in command. If the momentum can carry the price above $17,200, then the bulls will have a clear shot at the all-time highs.

However, traders can get cautious if the pair turns down from the current levels and drops below $16,000 once again. This will suggest that the market participants have rejected higher levels.

If the price sustains below $16,000, the bears will try to sink the BTC/USD pair below the 20-day exponential moving average ($14,596). Such a move will indicate that bulls are not buying the dips as the sentiment has turned negative.

ETH/USD

The bulls are finding it difficult to propel Ether (ETH) above the resistance line of the rising wedge pattern. However, the positive thing is that the bulls have not given up much ground.

ETH/USD daily chart. Source: TradingView

The bulls will again attempt to thrust the price above the wedge. If they can do that, the ETH/USD pair may rise to $488.134. The bears may again try to stall the up-move at this resistance. If they succeed, a drop to the 20-day EMA ($426) is possible.

Conversely, if the bulls can push the price above $488.134, the next leg of the uptrend is likely to begin. The first target on the upside is $520 and then $550. The upsloping moving averages and the RSI above 67 suggest that bears are in command.

The first sign of weakness will be a break below the 20-day EMA. Such a move could result in a drop to the support line of the wedge.

XRP/USD

XRP has been consolidating near the $0.26 overhead resistance for the past two days. This suggests that the bulls are not closing their positions in a hurry as they expect the price to break above the range.

XRP/USD daily chart. Source: TradingView

The rising moving averages and the RSI above 59 suggest that bulls are in control. A breakout and close above $0.26 could start the journey to $0.30. Above this level, the up-move may reach $0.326113.

Contrary to this assumption, if the bulls again fail to sustain the price above $0.26, then the bears will try to pull the price back below the moving averages. If they succeed, the XRP/USD pair may drop to $0.2295.

LINK/USD

The bulls failed to push and sustain Chainlink (LINK) above $13.28 on Nov. 11. This shows that the bears are aggressively defending this resistance. However, the positive thing is that the bulls have not given up much ground in the past two days.

LINK/USD daily chart. Source: TradingView

The bulls are currently attempting to drive the price above $13.28. If they manage to do that, the LINK/USD pair will complete an inverse head and shoulders pattern that has a target objective of $19.2731.

Both moving averages are sloping up and the RSI has risen above 58. This suggests a minor advantage to the bulls.

Contrary to this assumption, if the pair turns down from $13.28 once again, the bears will try to pull the price down to $9.7665. A break below this support will invalidate the bullish pattern.

BCH/USD

The bulls purchased the dip below the 20-day EMA ($257) on Nov. 12 but could not sustain the higher levels. This has attracted selling by the bears and Bitcoin Cash (BCH) has broken below the 20-day EMA.

BCH/USD daily chart. Source: TradingView

If the bears sink the price below the 50-day simple moving average ($247), the BCH/USD pair could drop to the next support at $231. The bulls have defended this support on two previous occasions, hence, a break below it may intensify selling and drag the price to $200.

However, the 20-day EMA is flat and the RSI is close to the midpoint, which suggests a few more days of range-bound action. The momentum could pick up if the bulls push the price above $280 or the bears sink the price below $231.

LTC/USD

Litecoin (LTC) has surged above the $64 resistance today, which shows that the bulls have overpowered the bears. The buyers will now try to sustain the momentum and drive the price above $68.9008.

LTC/USD daily chart. Source: TradingView

If they succeed, the next leg of the uptrend could begin. The next target is $80 and then a rally to $100 is possible. The upsloping moving averages and the RSI above 67 suggest bulls are in charge.

Contrary to this assumption, if the price again turns down from the current levels and plummets below $64, it will suggest a lack of buyers at higher levels. Such a move could attract profit booking that may result in a drop to the 20-day EMA ($57.86).

BNB/USD

Binance Coin (BNB) is currently stuck in a tight range between $28.97 and $27.30. The altcoin bounced off the support of this range on Nov. 12 and the bulls will now try to push the price above the moving averages.

BNB/USD daily chart. Source: TradingView

If they succeed, the BNB/USD pair could rise to $30 and a break above this resistance may open the gates for a rally to $32.

However, the downsloping 20-day EMA and the RSI just below the midpoint suggest a minor advantage to the bears.

If the price turns down from the current levels and breaks below $27.30, the pair may drop to $25.6652. A break below this support will signal weakness.

This site uses Akismet to reduce spam. Learn how your comment data is processed.