Cryptocurrencies trying to form a Base, Bitcoin At a Crossroad

During the past 24 hours, volatility shrank, and most coins tried to create a bounce. The current situation has improved a for Ethereum (+2.77%), Ripple(+4.28%), Eos (+3.31%) and LTC (+2.1%) while Bitcoin and its variants BCH and BSV are mostly unchanged. Also, if you look at the Crypto-sector heat map below, you should observe of the significant recovery of Stellar Lumens (+16%), ATOM( +7.4%), ADA(+7.28), and Tron (+6.24%). The total market capitalization is currently $221.3 billion, and the dominance of coins, excluding stablecoins is presently:

BTC: 67.77%
ETH: 8.22%
XRP:4.76%
BCH:1.84%
LTC:1.63%
EOS:12%
OTHER:14.59%

The most relevant piece of news is, in our opinion, the comments given by Benoit Coeure, member of the Executive Board of the European Central Bank, on an introductory speech to the Committee on Digital Agenda of the Deutscher Bundestag on Sept. 25. The statement was focused on the importance of stable digital currencies in exchange and commerce. Also commented on issues such as anti-money laundering and terrorism financing as the main challenges regulators would face.

 

Technical Analysis

Bitcoin (BTC)

Since yesterday, Bitcoin is creating a base just above its 200-day moving average. If today the price action is maintained, it could start forming a rounding top as it did in the final days of August to, then catch the strength to create a new upward leg. The bounce off of the 200-day MA would call the buyers again, as it might confirm that the bullish trend is not over yet. Also, that would discard the parallel descending channel and establish a descending wedge instead (observe the amber trendline), which is usually resolved to the upside. A close above $8,700 would be very positive to change the short-term and long-term view of this digital asset. Also, a violation on the close of the $8,200 level would mean the price is headed towards $7500.

Ethereum (ETH)

We see Ethereum continue moving in a retracing movement seeking a confluence of the $180 and the descending trendline, which is a projection of the main slope of the regression channel before the selloff. The current volume is light, though, so we would like to see a healthy close above $171.

Ripple (XRP)

XRP is still moving up, although the volume is fading. The price has bounced off a bit of the 0.25 resistance level. MACD has moved to the positive side, but it needs to break this resistance level is XRP is to continue climbing to 0.266. The descending trendline is another barrier to break, though. So, overall, the outlook is still bearish, and we keep our scenario of more drops for this token. Only a sharp buying activity on the Bitcoin would change this to a more bullish view. A cross under $024 will signal that the sellers are still controlling the action.

Stellar Lumens (XLM)

Stellar has bounced sharply. The price has entered the consolidation region that was formed before the previous sharp move to the upside. Currently, the price is up more than 12% after being rejected by the 0.05177 resistance. MACD has turned up as well. That gives reasons to think the price could continue moving upwards. To confirm that scenario, we would need a close above the mentioned resistance level. A drop below the support of 0.0587 would mean this scenario failed. The volume of this bounce started strong but has faded. That is a warning, so we should ask for the mentioned confirmation before going long.

 

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