Price Analysis 8/21: BTC, ETH, XRP, BCH, LINK, LTC, BSV, ADA, BNB, CRO – Bitcoin and several altcoins have formed bearish divergences, which suggests that the bullish momentum has weakened.
Rich Dad Poor Dad author Robert Kiyosaki believes that Warren Buffet’s recent closure of his bank stock positions is a warning sign that the world might be starting a “major banking crisis.” Therefore, Kiyosaki suggests traders buy safe haven assets such as gold, silver and Bitcoin (BTC) to protect themselves from the downward spiraling value of the fiat currencies.
Popular Bitcoin derivatives trader Tone Vays believes that Bitcoin could breakout to new all-time highs in 2021. He pointed out that historically, Bitcoin has tended to double in price after breaking out of its all-time high, especially if it took years to do that. Hence, if Bitcoin breaks above $20,000, Vays expects a rally to at least “$45,000 to $50,000.”
A report by Grayscale Investments suggests that the current market conditions are similar to the one seen in 2016 before Bitcoin began its stellar bull run. Grayscale highlights the growing dependence of the U.S. economy on expansionary monetary policy and believes that it will be very difficult to reverse it. This could stoke inflation, which will be bullish for Bitcoin.
While these are long-term projections, in the short-term, the total crypto market capitalization has slid from $380 billion on Aug. 17 to about $360 billion, which shows profit booking by short-term traders.
Investors will now want to know if the current correction will deepen or if the prices rebound in the coming days. Let’s study the charts to find out!
Given that Bitcoin has been in a strong uptrend, traders have consistently purchased dips to the 20-day exponential moving average ($11,570) because they believe that the rally will resume and the price would not dip to these levels again.
However, Bitcoin’s weak rebound off the 20-day EMA on Aug. 20 suggests that the bulls are not confident that the uptrend will resume, hence, they are not buying aggressively at this support.
The negative divergence on the relative strength index suggests that the momentum has weakened. If the price breaks and sustains below the 20-day EMA, the traders are likely to wait for the BTC/USD pair to find support at lower levels, before buying.
On a drop below the 20-day EMA, the decline can extend to the $11,100–10,900 support zone.
Contrary to this assumption, if the pair rebounds off the 20-day EMA, the bulls will make another attempt to push the price above the $12,113.50–$12,460 resistance zone. If they succeed, the uptrend is likely to resume.
The rebound off the 20-day EMA ($395) on Aug. 20 fizzled out close to $415.634, which suggests that the bears are aggressively defending this resistance. They will now try to sink Ether (ETH) price below the 20-day EMA.
If they succeed, a drop to $366 is possible. The bulls are likely to defend this support aggressively. A bounce off this support could keep the ETH/USD pair range-bound between $366–$415.634 for a few days.
The negative divergence on the RSI shows that the momentum has weakened. If bears sink the pair below $366, a drop to the 50-day simple moving average ($321) is possible.
Conversely, if the pair rebounds off the 20-day EMA, the bulls will make one more attempt to propel the price above $415.634–$446.479 resistance zone.
The weak rebound off the 20-day EMA ($0.285) on Aug. 20 suggests a lack of buyers at higher levels. If the bears can now sink XRP below the 20-day EMA, a drop to $0.268478 is possible.
The 20-day EMA has flattened out and the RSI has dropped close to the midpoint, which suggests a range-bound action in the short-term. A strong bounce off the $0.268478 support will signal strength and the bulls will try to push the price back to $0.326113.
Contrary to this assumption, if the bears sink the XRP/USD pair below $0.268478, a deeper correction to the 50-day SMA ($0.243) is likely.
Bitcoin Cash (BCH) is struggling to stay above the 20-day EMA ($293), which suggests a lack of buying interest among the bulls. The altcoin can now drop to the $280 support.
The flat 20-day EMA and the RSI close to the 50 level suggests a balance between supply and demand.
If the bears sink and sustain the BCH/USD pair below $280, it will be a huge negative as it would suggest a lack of buyers at higher levels. The next support on the downside is at the 50-day SMA ($266).
However, if the pair rebounds off $280, the bulls will once again attempt to carry the price to $326.30.
Chainlink (LINK) formed consecutive inside day candlestick patterns on Aug. 19 and 20, which showed indecision among traders. This was resolved to the downside today when the altcoin broke below the $14.69 support.
The bulls are currently attempting to defend the 20-day EMA ($14.12). If they succeed, the LINK/USD pair could rise to $17.6738. The bears are likely to defend this level aggressively.
The 20-day EMA has flattened out and the RSI is just above the midpoint, which suggests a range-bound action in the short-term.
However, if the bears sink and sustain the pair below the 20-day EMA, a drop to the 50% Fibonacci retracement level of $13.4906 and below it to the 61.8% retracement level of $11.9281 is likely.
The bulls defended the 20-day EMA ($59) on Aug. 19 but they could not push Litecoin (LTC) to the overhead resistance at $65.1573, which suggests a lack of demand at higher levels. This usually happens when traders believe they will get a better entry opportunity at lower levels if they wait for some time.
If the bears sink the price below the 20-day EMA, a decline to $56 and below it to $51 is possible. Such a move will suggest that the momentum has weakened and could result in a range-bound action for a few days.
The gradually rising 20-day EMA and the RSI in the positive territory suggest that bulls have a slight advantage.
If the LTC/USD pair rebounds off the 20-day EMA, it will suggest that the bulls are defending this support and this could attract buyers who will then try to push the price above the $65.1573–$68.9008 resistance.
Bitcoin SV (BSV) is not finding buyers even at the $200 support, which is a negative sign as it suggests that the buyers expect lower levels in the short-term.
If the BSV/USD pair breaks and closes (UTC time) below $200, it will complete a descending triangle pattern, which has a target objective of $142.
The 20-day EMA ($214) has started to turn down and the RSI has slipped into the negative territory, suggesting advantage to the bears.
Contrary to this assumption, if the pair rebounds off $200, the bulls will try to push it above the $227 resistance. If successful, it will invalidate the bearish setup that can result in a move to $260.86.
Cardano (ADA) closed (UTC time) below the $0.13 support on Aug. 19, which is a negative sign. The bulls tried to fake this move and push the price back above $0.13 on Aug. 20 but the bears aggressively defended the 20-day EMA ($0.136).
This suggests that the sentiment has changed from buy on dips to sell on rallies. If the ADA/USD pair closes (UTC time) below $0.125, a drop to the next support at $0.11 is possible.
The 20-day EMA has started to turn down and the RSI has dipped into the negative territory, which suggests that the bears are making a comeback.
This bearish view will be invalidated if the pair turns up from the current levels and rises above the 20-day EMA. Such a move will indicate strong buying at lower levels.
Binance Coin (BNB) is struggling to stay above the 20-day EMA ($22.15), which suggests that the bulls are not buying aggressively at this support.
If the bears sink the price below the $21.7628 support, a drop to the 50-day SMA ($19.86) is possible. Such a move will suggest that the bullish momentum has weakened.
The 20-day EMA is flattening out and the RSI is just above the midpoint, which suggests a range-bound action in the short-term.
Contrary to this assumption, if the BNB/USD pair rises from the current levels and breaks above $24.4588, a rally to $27.1905 is possible.
Crypto.com Coin (CRO) has been trading between the 20-day EMA ($0.1638) and the overhead resistance of $0.176596 for the past few days. This shows that the bulls are defending the 20-day EMA, which is a positive sign.
Today, the bulls had pushed the price above $0.176596 but they could not sustain the higher levels, which shows selling by the bears on sharp rallies.
If the CRO/USD pair sustains above the 20-day EMA, the bulls will make another attempt to push the price above $0.176596. If the price closes (UTC time) above this level, a rally to $0.20 is possible.
Conversely, if the bears sink the pair below the 20-day EMA, a drop to $0.154322 is possible. A rebound off this support could keep the pair range-bound between $0.154322–$0.176596 for a few days.
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