The prices of cryptocurrencies change quite rapidly and can be wild. With high attention and trading volumes, patterns are emerging, and technical trading becomes more and more useful. A predictable cryptocurrency slows down and turns back at a clear line of support or resistance. And when momentum is strong enough, the coin makes a clear break and leaves only dust behind it. These are the more predictable coins. Yet not all cryptos are born equal and some trade in a messy and choppy manner, making them less predictable and harder to trade.
Here are the top 5 most predictable cryptocurrencies, each with its characteristics:
- Ethereum: The "flippening" has not happened regarding market cap, but Ethereum ranks as the most predictable cryptocurrency. When the coin breaks out, ETH tends to mark the top or bottom of the range and then trade between the previous line and the new line, respecting the range. Also, its lower highs served as bearish signs, as one would expect. Ethereum also has a good memory for older lines.
- Bitcoin Cash: BCH has been in existence only for a short while, but its performance has been quite remarkable. Similar to ETH, BCH tends to mark the extreme of the new range upon a breakout. Its memory for old lines still falls short, despite its short history. Nevertheless, the clear separation of ranges is noteworthy.
- Litecoin: LTC tends to trend in clear moves to the upside or the downside. It also had an impressive double-bottom of late. The sharper moves were telling, as they indicated the trends via lower highs or higher lows, yet these sharp moves can sometimes be nasty.
- Bitcoin: The poster-child for the blockchain technology has a long history and high trading volumes, and this also helps in its predictability. Its uptrends and downtrends are quite straightforward, and it also respects the ranges. The reason for not placing it in the top spot also stems from its popularity: a few panic sell-offs it had suffered undermined its position. BTC tends to perform better when attention moves away from it.
- IOTA: This virtual coin used to be quite choppy and had an impulsive behavior, but things recently improved. The cryptocurrency is enjoying both range trading and clear trends at the same time. The sketchier past of IOT limits its predictability going forward.
There are clearly a few notable digital currencies which are not on the list and worth mentioning:
- Ripple: XRP shot to stratosphere like a Falcon but fell very heavily. The moves on the charts are erratic.
- Cardano: ADA may be in the top 5 concerning market cap, but the charts do not provide any useful information.
- NEO: The emerging crypto coin has a potential to enter the list, but it's still too choppy.
- Other cryptocurrencies such as Stellar (XLM), EOS, NEM, and even Dash all have occasionally had clear days of trading followed by messy ones.
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