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Bitcoin futures trading volume in its first week was only a fraction of cash Bitcoin transactions. Futures volume has been abysmal at $60 mln per day, compared to the cash transactions of $8.5 bln each day.
However, come Sunday, the CME will start Bitcoin futures trading. Additionally, large brokerage houses are likely to follow suit and allow their clients to trade in Bitcoin futures. If this happens, we are likely to see the futures volume pick up.
Will the participation of more traditional investors boost the market capitalization of Bitcoin and the cryptocurrency universe? Max Keiser who hosts the Keiser Report on RT certainly thinks so. He believes that futures trading will help the cryptocurrency market capitalization reach $1 tln and higher.
Notwithstanding, these are predictions for the long-term. Let’s look at the charts to find out the likely movement of cryptocurrencies in the short-term.
Bitcoin broke out to new lifetime highs yesterday after a three-day consolidation. This is a bullish development.
The breakout opens up a pattern target of $24,291.58 for Bitcoin. However, this target is unlikely to be achieved in a hurry. The cryptocurrency is likely to face some resistance at $20,000.
Our bullish view will be invalidated if the bears overpower the bulls and sink the digital currency below $15,200 levels.
With the start of futures trading on CME, we can expect an increase in volatility. Therefore, traders should reduce their position size for the next few days until volatility subsides.
Intraday traders, however, will get ample opportunity to place bets on both sides of the trade.
Ethereum fell to a low of $610.03 yesterday, close to our expectation of a fall to the 50 percent Fibonacci retracement level.
The long tail yesterday shows that bulls are eager to buy the dips. However, failure to break out to new lifetime highs shows that they are booking profits at higher levels. As a result, Ethereum is likely to remain range-bound until the price breaches $610.03 on the downside or $780 on the upside.
However, if the bulls’ breakout to new highs and sustain it, the next target on the cryptocurrency is $995.99.
These targets are only assumptions based on technical analysis. Many times these targets are not met and we change our view accordingly. Therefore, traders should always trail their stops higher to safeguard their profits and not be fixated only on the target.
We are in the money on our trade in Bitcoin Cash. So, does the chart pattern suggest further upside or has the rally run its course?
The cryptocurrency broke out and closed above the range on Dec. 14. This should have ideally propelled Bitcoin Cash towards its target objective of $2,387. However, it could not cross $2,100 levels.
Subsequently, bears attempted to push the cryptocurrency back into the range. However, the bulls have managed to close above $1,758 levels for the past three days, which is a positive sign.
The next up move will start once the price breaks out of $1,950 levels. Hence, please hold the positions with the stop-loss at breakeven. The bullish view will be negated once the price sinks below $1,520 levels.
On Dec. 15 the cryptocurrency pulled back to the 38.2 percent Fibonacci retracement of the rally. Nonetheless, the lower levels continue to attract buying from the bulls. We expect the bulls to attempt to break out of the lifetime highs again. If successful, Ripple will make a dash towards $1 levels and higher.
However, if bulls fail to breakout and sustain above the lifetime highs, we are likely to witness a few days of range-bound trading between $0.61 on the lower end and $0.88268 on the upper end.
The bulls purchased the fall to the critical support levels. However, the cryptocurrency continues to face resistance on every rise.
The chart pattern will become bullish in the short-term only on a breakout and close above the downtrend line, above which a rally to the lifetime highs is likely.
Nevertheless, if price fails to breakout of the downtrend line, it will lead to the formation of a descending triangle pattern, which is a bearish development.
The cryptocurrency will become negative on a breakdown and close below the critical support level of $3.032.
We had forecast a period of correction/consolidation in our previous analysis and that is what we got.
As expected, the bulls purchased the dips to $243.86 levels, which is the 38.2 percent Fibonacci retracement of the rally. However, we believe that the levels between $300 and $342.237 will continue to act as a stiff resistance. We believe that after the sharp rally, Litecoin will be range-bound for the next few days.
Notwithstanding, if the bulls’ breakout to new lifetime highs, then the next target objective on the upside is a rally to $497.53.
Though Dash has not run away to its target of $1,199.01, it’s sustaining above $815 levels, which is a positive indication. Bears attempted to push the cryptocurrency back below $815 levels on Dec. 15, however, they were unsuccessful.
This increases the possibility of an upside breakout of $979 and a rally towards the target objective. The bullish view will be invalidated if the digital currency falls and sustains below $815.
Traders who had purchased long positions on our earlier analysis should raise their stops to $780 on the remaining 50 percent positions.
The market data is provided by the HitBTC exchange.