Bitcoin, Ethereum, Stellar: Price Analysis, Feb. 26

26/02/2019 - huy
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A bottom formation after a long bear market is not a linear process. At various intervals, we are likely to witness spurts of buying and selling as the bulls and the bears attempt to establish their supremacy. After a smart recovery from the lows, when it looked like the bears had surrendered, came the plunge on Feb. 24, that wiped off about $15 billion from the total market capitalization within a few minutes.

 

Such selling is not always based on fundamental news or events. Technical factors like profit booking near a stiff resistance and initiation of short positions by aggressive bears can bring about such a sharp fall. While we expect volatility in the bottoming process, we are keeping our focus on the positive fundamental developments. The longer the markets disregard the fundamentals, the stronger the eventual breakout will be.

 

After Venezuela, now Russia plans to launch an oil-backed cryptocurrency. OPEC along with Russia are exploring options for settling their energy dealings in crypto instead of Petrodollars. If this happens, it will give a big boost to crypto markets. When a head of state endorses blockchain technology and recommends it to the leaders of other nations, it shows that the time of this technology has come.

 

BTC/USD

 

The recovery in Bitcoin (BTC) that started from $3,355 could not scale above the critical resistance of $4,255. The bears swung into action on Feb. 25 and pushed the price back down to the 20-day EMA. The downtrend line, which had previously acted as a stiff resistance, should act as a strong support now.

 

If the price bounces from current levels, the bulls will again try to break out of $4,255. If successful, it will indicate a double bottom formation that has a pattern target of $5,273.91. The traders can protect their long positions with a stop loss just below $3,236.09.

 

 
Contrary to our assumption, if the bears sink the BTC/USD pair below the downtrend line, it can again correct to $3,355. If the support fails to hold up, the next support on the downside is at $3236.09, below which the downtrend will resume.

 

Both the moving averages are flat and the RSI is close to the center, which points to a consolidation in the near term. The price action of the next couple of days will give us better insight on whether lower levels are in the offering or is this just a shakeout of the weaker hands.

 

ETH/USD

 

Ethereum (ETH) took a nosedive on Feb. 24 after rising above the overhead resistance of $167.32. We hope traders booked profits on half of their long positions as we had suggested.

 

 
The decline on Feb. 24 wiped off gains of the past six days. This shows the extent of the carnage. The ETH/USD pair is trying to bounce off the critical support at $134.5. The 20-day EMA is also nearby, hence, this level assumes significance.

 

A failure to hold this level will indicate weakness and will attract further selling. Below $134.50, a drop to $116.30 is probable. Therefore, traders can keep a stop loss of $125 on the remaining half position.

 

We do not want to close the position at current levels, because if the bulls succeed in defending the support, they will make another attempt to break out of $167.32.

 

XLM/USD

 

After rising above the 50-day SMA on Feb. 23, Stellar (XLM) reversed direction and plunged below the 20-day EMA on the next day. If the price sustains below the 20-day EMA, it can decline to $0.0750 and below it to the low of $0.07256747.  

 

 
Previous strong resistances act as supports after they are crossed. Thus, the downtrend line is likely to act as a strong support. If the XLM/USD pair bounces off this support, it will again attempt to scale the 50-day SMA.

 

Both the moving averages are flattening out and the RSI is close to the neutral zone. Hence, we anticipate a consolidation in the next few days. As the pair is still close to its yearly lows, we shall wait for a trend reversal before proposing a trade in it.
 
 
 
According to Cointelegraph
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