Joseph Young · 5 hours ago · 2 min read
News › XRP › Binance › Technical Analysis
Will Ethereum, XRP and Binance Coin follow Bitcoin’s uptrend?
Disclaimer: This article contains technical analysis, which is a methodology for forecasting the direction of prices through the study of past market data, primarily price and volume. The content presented in this article is the opinion of the author. None of the information you read on CryptoSlate should be taken as investment advice. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own diligence and consult with a financial advisor before making any investment decisions.
Bitcoin is giving signs that its bull rally resumed after breaking above $12,000 again. Other cryptocurrencies are not following the momentum, allowing BTC to regain 70 percent dominance. Despite other altcoins losing in satoshis, this technical analysis will explore whether Ethereum, XRP and Binance Coin have the potential to follow Bitcoin’s uptrend.
After reaching a yearly high of $366 on June 26, Ethereum retracted over 48 percent to hit $190 on July 16, which is where the 61.8 percent Fibonacci retracement level is. Although this is considered the ‘golden’ retracement area due to the high probability of a rebound, ETH has been consolidating between the 61.8 and 50 percent Fibonacci retracement level since then without much volatility.
Recently, the TD Sequential Indicator gave a buy signal in the form of a red nine candlestick on the 3-day chart. This bullish signal was validated after the current green two candlestick began trading above the previous green one candle, hinting that ETH could indeed rebound from current levels.
If Ethereum is bound to surge, it could find some resistance on its way up around the 38.2, 23.6 and 16.18 percent Fibonacci retracement levels that are sitting at $256, $297, and $318, respectively.
Based on the 1-day chart, it seems like the Ethereum’s upswing is inevitable. Under this time frame, an ascending triangle appears to be developing. Since it was formed at the bottom of the recent correction, this pattern could have the potential to reverse the trend from bearish to bullish. Thus, if the ascending triangle is validated, Ethereum could target a 16.5 percent upward impulse upon the breakout point, which is sitting around $227.
The Bollinger bands on the 12-hour chart could help determine if the upswing is indeed inevitable. As it can be seen on this time frame, the Bollinger bands are squeezing which indicates ETH entered a consolidation phase. Squeezes are typically followed by periods of high volatility. The longer the squeeze the higher the probability of a strong breakout. Thus, the range between $199 and $235 is a reasonable no-trade zone.
A break above $235 could lead to an upswing to the 38.2 percent Fibonacci retracement level. Meanwhile, a break below $199 could take ETH to retest the support given by the 61.8 percent Fibonacci retracement level. If that support fails, Ethereum could fall to the 78.6 percent Fibonacci retracement level.
XRP continues consolidating between $0.30 and $0.33, as it has been doing it for the past 4 weeks. Despite the low volatility that this cryptocurrency has experienced, there seems to be a triple bottom forming on the 1-week chart.
This is considered a bullish technical formation that indicates that there is strong support around the $0.30 level and bears may capitulate when the price breaks through the $0.38 and $0.47 resistance levels, usually resulting in eye-catching gains from liquidated shorts.
Nonetheless, different technical analysts, such as Tone Vays, tend to see triple bottoms as a bearish formations. They believe that the more times a support level is tested the weaker it becomes, and the higher the probability that it will break.
Due to the uncertainty given by the triple bottom pattern on the 1-week chart, the Bollinger bands on the 12-hour chart could bring more clarity about the short-term future of XRP. Under this time frame, the Bollinger bands are squeezing, an indication of the low volatility. Since squeezes are typically followed by periods of high volatility, the $0.30 to $0.33 trading range can be seen as a no-trade zone. Therefore, a move above $0.33 could take XRP to $0.38 or higher, while break below $0.30 could take it down to $0.24 or lower.
Binance Coin continues to trade below the 7-week moving average on the 1-week chart. This can be seen as a bearish sign indicating that if selling pressure increases, BNB could drop to the 30 or 50-week moving average to try and find support.
Adding to the bearishness, the moving average convergence divergence (MACD), which is commonly used to follow the path of a trend and calculate its momentum, experienced a bearish crossover between the 12-four-hour exponential moving average and the 26-four-hour exponential moving average over 4 weeks ago.
As a result, under the current conditions the only way that this cryptocurrency will resume the bullish trend, from a technical perspective, is if it moves above the 7-week moving average and breaks above the previous high of $39.60. This, in combination with a spike in volume, could be taken as confirmation that Binance Coin is poised to continue its bull rally and make higher highs.
The Fibonacci retracement indicator could help identify the different price points that act as barriers due to the high levels of supply and demand. Thus, if Binance Coin continues depreciating, it could find some level of support around the 50 or 61.8 percent Fibonacci retracement levels that are sitting at $21.9 and $17.7, respectively. Conversely, if volume starts picking up and BNB tries to break above the recent all-time high, it will find some resistance around the 23.6 and 16.18 percent Fibonacci retracement levels.
Based on the 1-day chart, it seems like BNB could actually be on its way up since an Adam and Eve double bottom pattern seems to be developing. This is considered a bullish reversal formation that occurred after the price of Binance Coin dropped to form a V-shaped valley, rose, and then pulled back again to form the current wider and more rounded valley near the price of the first one.
If the buying pressure increases and BNB is able to break above $31.5 or the 50-day moving average, it could be an indication that the Adam and Eve double bottom pattern has been validated and this crypto could be targeting $36.7. However, a drop below $26 or the 150-week moving average will invalidate this pattern and could be taken as a sign that BNB will try to test the support given by the 200-day moving average.
Based on the recent price movement, Bitcoin has managed to take the attention of the market leaving nearly all altcoins behind. Although at the moment, all eyes seem to be on BTC, it seems like the attention could soon shift into altcoins.
Based on this technical analysis, Ethereum could soon surge at least 16.5 percent if the ascending triangle seen on the 1-day chart is validated. Similarly, Binance Coin may surge upon the break of the Adam and Eve pattern. Finally, XRP has the potential to make new yearly highs if the triple bottom pattern seen on the 1-week chart is confirmed.
This is possible that these cryptocurrencies will follow Bitcoin’s path, but it will be wiser to wait for confirmation of the different bullish patterns seen before entering these trades while enjoying BTC’s uptrend.