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Though the stock markets around the world are in a bull run, their returns pale in comparison to the cryptocurrencies. Hence, wealth managers will soon have to start investing a portion of their assets in digital currencies.
In that regard, a French asset management company TOBAM has announced the creation of a Bitcoin mutual fund, which will help its clients gain exposure to Bitcoins.
Even JPMorgan Chase, whose CEO Jamie Dimon has been critical of Bitcoin is likely to offer its clients access to Bitcoin futures.
While many investors like Mike Novogratz and Ronnie Moas continue to be bullish on Bitcoin, commodity guru Jim Rogers has warned of a bubble. Let’s study the charts to find out if we can spot a trade.
Yesterday, though the bears attempted to break the momentum in Bitcoin, their endeavor was met with strong buying by the bulls at lower levels.
The digital currency has closed above the $8,000 levels for the past two days. This shows that the momentum is intact and buyers are willing to step in on every dip. However, the bullish momentum will halt if the bears manage to push Bitcoin below $7,700 levels.
On the other hand, a breakout above the ascending channel will be bullish for the cryptocurrency. I anticipate a move to $9,969 if Bitcoin sustains above $8,500 levels. However, it is unlikely to be a straight dash towards the target. Whole numbers, usually, act as a resistance; hence, I expect a hurdle at $9,000.
For any fresh trades, the risk to reward ratio is not favorable, as the stop loss is deep. Therefore, I am not suggesting any long positions at the current levels.
For the past three days, Ethereum has been facing resistance at the downtrend line of the symmetrical triangle.
If the digital currency can breakout and close above this resistance line, it will become positive.
Its immediate targets are $395 and $421. However, I anticipate a breakout of both these overhead resistances. Hence, I suggest holding on to the 50 percent open positions initiated back at $315 levels.
Our present stop loss is way back at $315. Let’s protect some of the paper profits. You might want to raise the stop loss on the existing position to $330, which is just below the 20-day EMA.
After trading in a tight range for the past three days, Bitcoin Cash is trying to resume its uptrend. It has broken out of the small downtrend line, which is a bullish development. Traders can initiate long positions at $1,360 levels and keep a stop loss of $1,100.
I expect the traders who missed out on the previous rally to buy, once the uptrend resumes. There is a small resistance at $1,400 and another one at $1,549. However, I expect Ripple to breakout of these resistances and rally towards $1,825 and $2,054.9, which are 50 percent and 61.8 percent Fibonacci retracement levels of the fall from $2,799 to $851.12.
Don’t initiate the long positions at lower levels because a failure to sustain above the downtrend line will indicate selling at higher levels. Therefore, please wait and buy at the suggested levels. This is a risky trade, hence, please keep the allocation size only about 50 percent of the usual.
The trade on Ripple is live from Nov. 16 at a buy price of $0.22713. I had expected the digital currency to pick up momentum once it crossed above the downtrend line and both the moving averages.
However, it is struggling to move above $0.245 levels. A correction from the current levels can push the cryptocurrency back to $0.22, which is a strong support.
On the other hand, if it can rally above $0.245 levels within a day or two, it is likely to rise towards $0.30, which is a good place to lock in at least 50 percent profits.
On the previous two instances, the virtual currency faced considerable selling at $0.3 levels. Generally, it is seen that the breakout happens on the third attempt. Hence, I believe in keeping 50 percent long positions with a trailing stop loss. A breakout above $0.3 can propel Ripple towards the lifetime highs.
Our traders are carrying long positions from $60.4 levels. I had suggested booking 50 percent profits at $71 and holding the remaining positions with stops at breakeven. However, for the past five days, the digital currency is finding it difficult to breakout of $72.
It is facing selling at the upper end of a larger range. If Litecoin doesn’t breakout of this overhead resistance soon, it will start a correction. Therefore, stops on the remaining positions can be raised to $64. Let’s at least protect partial paper profits.
However, if the digital currency breaks out and closes above $72, a move to $82 or even to the lifetime highs is possible.