Several major cryptocurrencies have seen strong buying at lower levels, suggesting that the uptrend is probably going to resume once Bitcoin finds support.

Bitcoin (BTC) rallied above $10,000 on May 7 and just when everyone was preparing for the long-anticipated halving surge the top-ranked cryptocurrency on CoinMarketCap plunged over 15% to hit a coffee of $8,130.58.

However, the sharp fall in price didn’t attract further selling, which suggests that traders aren’t panicking and dumping their positions. this means that the sentiment is to continue buying on the dips.

Crypto market data daily view. Source: Coin360

When Bitcoin plummets, it drags most cryptocurrencies along side it, but it’s also important to recollect that several major cryptocurrencies are in an uptrend for the past few weeks.

Corrections in an uptrend offer a buying opportunity to the traders who had missed the bus earlier. With the Bitcoin halving but two days away, volatility is probably going to stay high. Therefore, within the next few days, traders might consider reducing their position size to stay their risk in check .

Let’s see which five major cryptocurrencies offer attractive trading opportunities within the short-term.

BTC/USD

Bitcoin (BTC) broke above $9,200 on May 7 and hit a high of $10,058.52 on an equivalent day. However, the $10,000 level proved to be a troublesome hurdle to cross.

BTC-USD daily chart. Source: Tradingview​​​​​​​

After a minor correction on May 8 and 9, the BTC/USD pair plummeted on Saturday evening. The failure of the bulls to sustain the worth above the previous resistance turned support at $9,200 could have led to selling by the bulls and initiation of short positions by the bears.

The pair is currently trading inside an ascending channel where the worth moves between the support line and therefore the resistance line of the channel.

$10,000 was on the brink of the resistance line of the channel and from there the pair fell to $8,130.58, which is simply above the support line of the channel. The strong bounce off this level, as seen from an extended tail on the downside, may be a positive sign.

This suggests that the bulls didn’t panic but used the drop to the support line of the channel to shop for . As long because the price remains inside the channel, the trend remains up and powerful declines to the support line of the channel are often purchased.

The first sign of weakness are going to be a drop below the channel. If that happens, long positions should be avoided until a replacement buy setup forms once more .

BTC-USD 4-hour chart. Source: Tradingview​​​​​​​

The 4-hour chart shows that the worth dropped sharply within a brief time-frame (shown via the blue arrow on the chart). If the traders watch the 30-minute chart, they will see that the pair dropped from $9,566.52 to $8,130.58 within half-hour . Such a fall usually suggests liquidation by an outsized player.

However, a positive is that the worth recovered sharply from $8,130.58 and since then has been trading above the $8,500 levels. The recovery might face stiff resistance between $8,960.97 and $9,156.94, which corresponds to 50% and 61.8% Fibonacci retracement levels of this leg of the autumn .

If the pair bounces off $8,500, it might be an honest entry point for the traders with a stop-loss placed slightly below the channel. The target objective on the upside is $9,600 then $10,000.

Conversely, if subsequent drop breaks below $8,500, traders can await the worth to bounce off the support line of the channel, which may offer another buying opportunity with stops placed slightly below the channel.

If the bears sink the worth below the channel, it’ll be an enormous negative because it will signal a possible change in trend. Therefore, bottom fishing should be avoided if the pair sustains below the channel.

ETH/USD

Although Ether (ETH) broke above the resistance line of the ascending channel on April 29 and 30, the bulls did not sustain the upper levels. That resulted during a correction, which found support at the 20-day simple moving average ($204) on May 7.

ETH-USD daily chart. Source: Tradingview​​​​​​​

However, today, the 2nd-ranked cryptocurrency on CoinMarketCap turned down sharply and plunged below both moving averages and therefore the support line of the ascending channel.

Due to this, the 10-day exponential moving average ($203) has turned down marginally and therefore the relative strength index has slipped into the negative territory. this means that the bears are trying to form a comeback. the worth should sustain below the channel to verify a change in trend.

Currently, the worth has bounced off the support line of the ascending channel, which may be a positive sign. this means that the bulls view the dips as a buying opportunity. The pair is probably going to select up momentum on an opportunity above the downtrend line.

ETH-USD 4-hour chart. Source: Tradingview

The ETH/USD pair is attempting to reverse direction from the support line of the ascending channel. However, the bears are defending the 38.2% Fibonacci retracement level of the foremost recent leg of the decline, which is at $193.946.

If the worth turns down and plummets below $181.40, it’ll signal weakness and will end in a decline to $167 and below it to $150. Therefore, traders can initiate short positions below $181 with stops placed just above $194.

Conversely, if the worth turns up from the support line of the channel, it’ll signal buying on dips. Therefore, the bulls can purchase the bounce off the channel with the stops placed at $181. If the bulls push the worth above $197.821-$201.696 resistance, a rally to the downtrend line is feasible .

As the markets are volatile, traders should keep trailing their stops higher to scale back their risk.

XTZ/USD

Tezos (XTZ) has been trading inside an ascending channel, which shows that the trend is up. However, the bears are aggressively defending the $3 levels for the past few days. Although the bulls broke above this level on April 29 and 30, they might not build abreast of the breakout.

XTZ-USD daily chart. Source: Tradingview​​​​​​​

On May 9, the 10th-ranked cryptocurrency on CoinMarketCap rotated from slightly below $3 levels. The selling intensified today because the price slipped below the strong support of $2.55.

Although the bears broke below the support line of the channel, they might not sustain the worth below the channel. The long tail on the candlestick shows that the bulls are aggressively defending the support line of the channel.

The 10-day EMA ($2.72) has turned flat and therefore the RSI has dipped to only above the midpoint, which suggests a balance between the bulls and therefore the bears. If the bulls can keep the worth above $2.55, it could offer a buying opportunity.

XTZ-USD 4-hour chart. Source: Tradingview​​​​​​​

The XTZ/USD pair is probably going to face resistance within the $2.6015-$2.0686 zone, which corresponds to the five hundred and 61.8% Fibonacci retracement levels of the foremost recent leg of the autumn .

If the worth turns down from this resistance zone, a fall to $2.50 and below it to the support line of the channel is feasible . The bulls are likely to defend this zone aggressively. If the worth bounces off the zone, it could offer a buying opportunity to the traders.

The stops for this trade are often kept slightly below $2.20. On the upside, a rally to $2.70 then to $3 is feasible . The traders can trail the stops higher because the price moves up.

This bullish view are going to be invalidated if subsequent dip breaks below the support line of the channel and sustains below $2.240. If this level cracks, long positions are often avoided until a replacement buy setup forms.

ADA/USD

Cardano (ADA) has been facing stiff resistance at the overhead resistance at $0.0522712 while the bulls are buying the dips to the support at $0.0468137. This tight range trading suggests a balance between buyers and sellers.

ADA-USD daily chart. Source: Tradingview

The 13th-ranked cryptocurrency on CoinMarketCap plunged to a coffee of $0.0427299 today but the sharp recovery from the lows shows aggressive buying by the bulls. If the bulls can sustain the worth above $0.0468137, it could offer a buying opportunity.

Conversely, if the worth again slips back below $0.0468137, it’ll signal weakness. Below this level, a retest of $0.0427299 is feasible . If this support also cracks, a deeper correction are going to be on the cards.

ADA-USD 4-hour chart. Source: Tradingview

The 4-hour of the ADA/USD pair shows that the worth is stuck during a $0.0543484-$0.0461143 range. Though the worth dipped below this range, the bulls couldn’t sustain the lower levels. This resulted during a sharp pullback, which shows strong buying on dips.

However, the recovery is facing resistance within the $0.0477515-$0.0489368 zone, which corresponds to 50% and 61.8% Fibonacci retracement levels of the foremost recent fall.

If the bulls buy subsequent fall to the $0.0468137-$0.0461143 support zone, it’ll indicate demand at lower levels. Therefore, traders can purchase the bounce off this zone with a target objective of $0.053.

This bullish view are going to be invalidated if the bears sink and sustain the worth below $0.0461143. If that happens, a deeper fall is probably going , hence, traders can avoid bottom fishing below this level until a replacement buy setup forms.

NEO/USD

NEO has been trading inside the ascending channel for the past few weeks. Though the bulls broke above the resistance line of the channel on May 8, they might not sustain the breakout.

NEO-USD daily chart. Source: Tradingview​​​​​​​

As a result, the 20th-ranked cryptocurrency on CoinMarketCap again dipped back to the channel. However, with both moving averages sloping up and therefore the RSI within the positive territory, the advantage is with the bulls.

Today, the bulls purchased the dip to the 10-day EMA ($9.8), which may be a positive sign. This shows that the bulls aren’t expecting a deeper fall to enter long positions. The trend will remain positive as long because the price remains inside the channel.

The first sign of weakness are going to be if the bears sink the worth into rock bottom half the channel. an opportunity below the support line of the channel will signal a change in trend.

NEO-USD 4-hour chart. Source: Tradingview​​​​​​​

The 4-hour chart shows that the failure of the bulls to sustain the worth above the resistance line of the channel attracted profit booking. That dragged the worth to only below the centerline of the channel.

However, strong buying on the brink of $9.64 levels has pushed the NEO/USD pair back to the highest half the channel. this is often a positive sign. If the bulls can scale the worth above $10.50, a rally to the resistance line of the channel at $11.30 is feasible Therefore, traders can purchase at $10.50 with a stop-loss below $9.60.

On the opposite hand, if the pair dips below $9.63378, a drop to the support line of the channel is feasible . A bounce of this level also can offer a low-risk buying opportunity.

In this case, the stop-loss are often kept slightly below the channel because if the worth sustains below the channel, a deeper correction is probably going .

LEAVE A REPLY

Please enter your comment!
Please enter your name here