Cryptocurrencies started to grow: will there be a continuation of the trend?
As we expected in the review on September 20, the flash-crash in Bitcoin, which was immediately bought-out by large players, was the basis for the beginning of growth. Bitcoin managed to rise above the key support level around $6,600. At the same time, such cryptocurrencies as Ripple managed to show a two-fold increase. The main question at the beginning of a new week is whether the buyers are strong enough for further growth, or it is time to fix the profit.
So far, there are more reasons for optimism:
The long period of accumulation of BTC is likely to end. Such an indicator as the percentage of Bitcoin in the total market capitalization began to decline rapidly for the first time since early May. Interest in the second tier indicates a generally bullish sentiment. Recall that in the second stage of growth, as a rule, the strongest altcoins begin to grow, and the final stage is characterized by the growth of shitcoins;
The technical picture on the charts of the main altcoins is bullish;
Cryptocurrencies stopped responding to negative news. A major hack of Zaif crypto-exchange and the news of the next postponement of the SEC's approval of crypto-ETFs were used for increasing of long positions.
Significant progress in the adoption of large investors from the "traditional" economy might be the basis for the future growth.
Among the negative factors, there is disturbing increase of small players’ long positions in Bitcoin futures contracts on the CBOE and CME derivatives exchanges, while professional traders are have mostly short positions.
Also, in ETH / USD there is a record amount of longs accompanied by full capitulation of bears. This imbalance should be alarming for bulls.
I order to consolidate the upward impulse, buyers need to break the triangle in the BTC/USD pair, and where the price fluctuated within the last 3 months, and now this level corresponds to $6900-7000. If successful, the next major target for growth is $7,400, where the forces of bulls dried up last time. Additionally, there is also allocated 200-day moving average, which is a watershed between the bull market and the bear market. Since the beginning of March 2018, all attempts by bulls to take the price over this important indicator have bumped into strong sales.
The move below 50 MA at $6,550-6600 will indicate a failure of growth attempts. At the moment, this important level is being tested. We recommend observing the situation. There is a higher probability that the bulls will be able to develop an upward movement, but it is better to stay cautious.
Andrey Mastykin, cryptocurrencies analyst of Electus
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