Crypto 2018 Price Analysis: The market has been volatile over the last couple of days. Does the change in behavior signal a possibility of a further fall? We shall try to forecast it using our chart analysis. The South Korean government’s proposed regulations and curbs on cryptocurrency trading have dampened the sentiment. After all, the nation with a relatively small geographical territory is responsible for a sizeable trading volume, about one-fifth by some measures, in Bitcoin.
Nick Colas, one of the first Wall Street analysts to cover Bitcoin, believes that 2018 will see a surge in volatility with about 40 percent falls. If that happens, timing the markets become that much more important. A buy and hold strategy, similar to 2017, might not be the best way to trade Bitcoin.
The cryptocurrency has a strong support at the trendline. We expect the bulls to attempt a recovery from here. If they are able to break out of $16,494.53 levels, we should see a retest of the highs.
On the other hand, if the BTC/USD pair breaks down of the trendline, it can fall to $12,788.14 levels, which is a critical support zone.
Though not perfect, the digital currency is forming a bearish head and shoulders pattern, which will complete on a breakdown and close below the neckline (drawn in orange color on the chart). However, we expect strong buying support to emerging between $10,704.99 to $12,788.14.
With conflicting signals, we are unsure about the next possible direction in Bitcoin. We shall watch the action from the sidelines until the picture clears out.
The digital currency is now likely to fall to the 20-day EMA, which should offer a strong support.
However, if negative sentiment prevails and the cryptocurrency breaks below the 20-day EMA, its next support is at $600 levels.
We will attempt a buy on the ETH/USD pair only when it breaks out and closes above the downtrend line (the orange line drawn on the chart).
The LTC/USD pair has also formed a bearish head and shoulders pattern with the neckline at $240. If this level breaks, the pair has a lower pattern target of $110. However, we don’t see a straight slide to the target objective. The bulls will attempt to hold the supports at $220 and $175.199. Whether the supports hold is difficult to predict.
Our bearish view will be invalidated once the digital currency trades above the 61.8 percent Fibonacci retracement levels of $295.586.
If the IOTA/USD pair breaks down and closes below the range, its uptrend will be in danger. The final support zone is between the 50-day SMA and the 61.8 percent Fibonacci retracement level of $2.62196. Below this, IOTA can plunge to $1.81512 levels.
On the other hand, if the bears are unable to sustain below the support of the range, the cryptocurrency will remain range bound between $3.36990 and $5.59.
f the bulls manage to sustain above the $1.24950 levels, the XRP/USD pair should rally towards its target objective of $1.5.
Our bullish view will be invalidated if the digital currency breaks below the trendline support. As the sentiment across most other cryptocurrencies is negative, traders who are long Ripple should trade with an appropriate stop loss.