Last week saw strong selling in almost every asset class as traders panicked as the corona virus pandemic spread around the world. Cryptocurrencies were also under intense selling pressure on March 12 and 13, wiping out around $ 92.5 billion in total market capitalization. Now, the bulls are trying to recover.
The fall of the past few days has shaken the belief that Bitcoin will be like gold as a safe and preferred haven to hide when the stock market collapses.
However, co-founder and partner at Morgan Creek Digital, Anthony Pompliano said that the economic shutdown caused by the corona virus epidemic has led to a liquidity crisis for all asset types, including assets. Safety is also being sold.
During the previous financial crisis, gold also witnessed a strong sell-off in the early days when investors preferred cash over holding any assets. However, after that, gold entered a bull market for many years. Investors who buy dip or hold their gold have made a lot of profit. Pompliano believes that investors holding their Bitcoin will reap the benefits when central banks resort to cutting additional interest rates and easing currencies to overcome the current recession.
Overview of the crypto market on March 16 | Source: Coin360
In the short term, the volatility is likely to remain high as the corona virus pandemic has not shown signs of decline. However, we believe that the current price cut could provide the best buying opportunity for long-term investors after the bottom is confirmed. Join us in analyzing the best performing coins for the past seven days, to see how their charts are forming.
LEO technical analysis
LEO has been the best performing coin for the past seven days because it managed to succeed in the crypto massacre with a 3% drop. This makes it one of the top 10 coins with the highest market capitalization.
During the week, the total number of burned LEO tokens surpassed 15 million. While the increased volatility has caused other cryptocurrencies to plummet, it turns out this is an advantage for LEO when a large number of tokens were burned on March 12 and 13.
Weekly LEO / USD chart | Source: TradingView
The LEO / USD pair has been trading in a tight range from $ 0.90- $ 1.04 for the past few weeks. This shows that the pair has stabilized and did not participate in the recent sell-off.
If the bears can scale below the range, a drop to the low of $ 0.805 is probable. We anticipate the bulls to defend this support positively. However, if the selling strengthens, the pair will be broken down to a new low, a drop to $ 0.70 is possible.
Conversely, if the bulls can push the price above $ 1.04, a move to $ 1.17 is possible. If this level is crossed, the pair can retest the strong resistance at $ 1.36. We hope the bears will actively defend this level. However, if the bulls can scale above $ 1.36, the pair will pick up momentum.
XLM technical analysis
While Stellar has dropped about 31%, it is the second best performing coin in the past seven days. This shows the sharp decline being seen in major cryptocurrencies.
Weekly XLM / USD chart | Source: TradingView
The XLM / USD pair has been trading in a range from $ 0.042 to $ 0.088 in the past few months. However, the strong sell in the past week pushed it below the critical support at $ 0.042 and dragged the price down to $ 0.026.
Although the breakdown of new yearly lows is a negative sign, we like the way the pair escapes the lows. This shows strong demand at lower levels. If the bulls can push the price back above $ 0.042 and sustain it for a few days, then this will indicate that the current decline is a bear trap.
We anticipate the bears to provide a strong resistance at the zone of $ 0.042 – $ 0.051, above which, it is likely that XLM / USD will gradually move to $ 0.088.
However, if the bulls fail to sustain the price back above $ 0.042, then the bears will try to lower the price below $ 0.026. If successful, the downtrend will resume.
ETC technical analysis
Ethereum Classic also faced bear weight and plunged about 32% in the past seven days. However, this has made it the third best performing coin in the past week. The ETC block reward will be reduced by 20% from 4 ETC to 3.2 ETC on March 16. Let's study the chart to see how it will perform in the coming weeks.
Weekly ETC / USD chart | Source: TradingView
The ETC / USD pair has been trading in a large range from $ 3.4 to $ 14 for about a year and a half. After failing to break out of this range from January 29 to February 13, the pair succumbed to selling pressure.
Last week, the sharp drop caused it to break below the $ 3.40 support level to reach a new yearly low of $ 3.08. Although this is a negative sign, we like the rapid bounce of the price at this level, which shows that the bulls' buying is lower.
The best way to trade an asset is to buy when the price exits from support of the range. Therefore, traders can watch the price action of this pair for a few more days, and buy if the price sustains above $ 4.0.
The stop loss can be set just below the recent lows. Because the overall sentiment of the market is negative, we suggest traders get around 40% of position size compared to normal. The rest of the position can be added after the bulls can push the price above the 20-week EMA. Contrary to our assumption, if the price turns from the current level and plummets below $ 3.08, a new downtrend will begin.
XRP technical analysis
XRP has lost about 33% in the past seven days and it became the 4th best performing coin of the week. So could XRP turn around or will it continue to decline in the next few days? Let's study the chart.
Weekly XRP / USD chart | Source: TradingView
The failure of the bulls to maintain the price above $ 0.342 last month attracted profit booking. Since then, the XRP / USD pair has fallen into a descending channel. The selling has become stronger over the past week as the pair fell below the critical support of $ 0.174 and also broke below the support line of the descending channel.
The pair dropped to new multi-year lows of $ 0.14, which is a negative sign. Though the price bounced back from the lows, the bulls could not push the price back above $ 0.174.
This shows a lack of urgency for the bulls, even at this low price, because they don't believe that XRP has bottomed out. If the price continues its downtrend and breaks below $ 0.14, the next support can be psychological support at the round figure at $ 0.10. If this support also breaks, the next support is $ 0.070.
On the contrary, if the bulls can push prices back above $ 0.174, it will indicate lower demand. We shall wait for the pair to rise above the descending channel before making any positive changes.
Technical analysis HT
Huobi Token has rounded the list with a drop of about 34% in the past seven days. The Huobi Group has launched Huobi Lite, a new mobile application that allows users to make large transactions without paying any fees or commissions. A few days ago, on March 5, Huobi launched operations in Thailand without fear of the strong growth of corona virus in the region.
Weekly HT / USD chart | Source: TradingView
The HT / USD pair is currently trading in an ascending triangle. Though the price broke below the support line of the triangle this week, the positive thing is that the bears could not sustain the lower levels.
A strong recovery from the low indicates strong demand at lower levels. Currently, the price has re-entered the triangle. If the bulls can hold the price on the support line of the triangle on the next fall, it will signal that the current decline is a bear trap.
If the price can sustain above $ 3 for a few days, it will give us an opportunity to buy with the goal of $ 5.35 in the medium term. A break above $ 5.35 will be a big positive.
However, if the bears can sink the pair below the support line of the triangle again, this will be a huge negative as it will invalidate the ascending triangle pattern. In such a case, a reduction of $ 1 is possible.
Disclaimer: This is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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