By Rakesh Upadhyay
The traders continue to pile on Bitcoin, while altcoins languish. Bitcoin’s market dominance has crossed 55 percent, which shows that it’s now becoming a crowded trade. At times, it’s a good strategy to take the contrarian bet against the crowd.
So, is it a good time to book profits on our Bitcoin positions and buy a few altcoins, or does Bitcoin have legs to further extend the rally? Let’s see.
BTC/USD
Leading up to its first fork in August, Bitcoin prices were in a corrective phase till about 15 days prior to the D-day. This time, however, prices have been in a consistent uptrend since bottoming out on Sept. 15.
After Bitcoin Cash was created, Bitcoin broke out and closed at new highs on Aug. 5, which started a strong uptrend that carried the cryptocurrency roughly 71 percent higher in just under a month. Will the same scenario be repeated this time?
Looks unlikely. Last time, there were a number of folks who had sold off prior to the fork and were sitting on the sidelines. When Bitcoin did not crash, as a few had expected, all this money jumped back in, boosting prices within a short span of time.
However, this time, people seem to be buying prior to the fork, so that they can benefit from the new coins. This is looking like a crowded trade. Can this get more crowded? Certainly.
However, as we are sitting on decent profits on about 35 percent of our original position, we recommend booking out completely at current levels. Can prices rise further from here and make us look like fools?
They certainly can.
However, it can equally fall back below $5000 once this buying frenzy ends. It’s always better to pocket good gains after a buying stampede and wait for the next opportunity.
We may have to buy at higher levels, but, that’s how it is. It’s very difficult to buy at the bottom and sell at the top.
Nevertheless, for traders who want to hold on to their long positions, the next target on the cryptocurrency is $6197. Bitcoin has support at the $5000 levels, which had been a strong resistance until now. The cryptocurrency will not become negative until it breaks below $4800 levels.
ETH/USD
Ethereum continues to remain volatile, but is on the verge of breaking out of the range. In our last trade, we were caught on the wrong side, as the breakout was faded by the bears. So, how should we approach it now?
Even today, the cryptocurrency has formed a very large range with an intraday high of $352.52 and an intraday low of $274.67. Though prices have broken out of the range, which makes us bullish, the stop loss for the trade is very deep.
After four previous false breakouts, we would rather wait for Ethereum to end the day above the range, signaling the start of a new uptrend.
On a close above the range, our first target is $354, above which, a move to $400 is also possible. However, we are not recommending a trade on Ethereum until we get a closing above $317.
BCH/USD
Bitcoin Cash is not showing any interest either from bulls or bears. It continues to slide gradually, struggling to hold the $300 levels.
The cryptocurrency is attempting to find support at the $282 levels. However, the pullback from the support is not very convincing. If Bitcoin Cash breaks below the immediate support zone of $265 to $282, it is likely to retest the lows.
On the other hand, any pullback is likely to face resistance at the downtrend line and the 20-day exponential moving average (EMA).
There are no bullish setups, therefore, we are not recommending any trade on it.
XRP/USD
As is the case with most altcoins, Ripple is also facing selling pressure. As a result, it has fallen back into the descending triangle.
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