Trading cryptocurrencies from the TOP 20 in the conditions of the COVID-19 crisis

04/24/2020 0 Comments

Today, the world is facing a truly unusual problem. The coronavirus outbreak in Asia, which was first seen as an impending but distant threat, is now leading to the collapse of many companies and economies. Moreover, the “coronarita” threatens disruptions in international economic relations that were created over many decades. As the world grapples with the COVID-19 pandemic, the value and acceptance of Bitcoin and cryptocurrencies will only grow, from routine payments to much more complex applications that have yet to be invented and created. Bitcoin has provided its users with a new financial canvas, drawing an impressive first layer. Other cryptocurrencies added details to this canvas, turning it into a complete work.

In the context of the” coronacrisis”, the demand for cryptocurrencies has grown significantly, primarily for the largest cryptocurrencies from the TOP 20 by capitalization. Technical analysis for short-term trading of some of them we will consider today.

Dash: impressive recovery and further growth

Dash is the only cryptocurrency that combines the characteristics of both an adept of online privacy and conventional cryptocurrencies, so this altcoin is head and shoulders above its direct competitors: Monero, ZCash, GRIN and Decred, both in terms of market capitalization, and in terms of total daily transactions and fees, as well as daily active addresses.

As for price behavior, DASH is probably one of the best players currently, along with Chainlink and Tezos, among the top 20 cryptocurrencies, as it was in the black against the us dollar by 11%, bitcoin by 21% and Ethereum by 31% during March 2020, when the crypto market was falling globally.

But traders also like this altcoin because of the huge fluctuations that Dash is able to make in relatively short periods of time. These fluctuations, indeed, do not always occur in an upward direction, but their scale provides opportunities for profit on both short and long positions.

The recovery demonstrated by the Dash cryptocurrency after a rapid price drop of 57%, during the General collapse that shook the cryptocurrency market to the ground, was simply impressive. However, experienced traders should have expected this recovery, mainly because the “bearish” volume that accompanied the huge red candle from March 12 was significantly smaller compared to the volume we observed the next day. This fact should be interpreted as the weakness of sellers and the hidden strength of buyers.

After testing the resistance at $ 50 twice, which was, in General, the edge of the bearish control area, DASH formed a perfect picture of the ” morning star “with a stunning green candle, which served as the basis for the subsequent formation of the”bull flag”. But most importantly, Dash demonstrated complete disregard for the market crisis caused by the COVID-19 coronavirus pandemic, which should serve as proof that traders and investors have great confidence in this cryptocurrency and are ready to take it out of the “gutter” in a short period of time.

Based on this behavior, we can conclude that Dash may be one of the three cryptocurrencies that contain an obvious “bullish” charge, which can be fully disclosed even in the current difficult conditions in the global financial markets.

While the price behavior of some other cryptocurrencies gives rise to suspicions of market manipulation, mainly due to signs of artificially inflated demand, DASH’s trading volume shows steady, healthy growth that is fully correlated with price behavior.

What else is appealing about Dash at the moment is that it has clearly come out of a small downtrend that has persisted since mid-February. Thus, the “morning star” pattern could give a sign of a trend reversal, especially since it appeared against the background of a “bullish” divergence on the 14-period RSI.

Now the price is moving towards the persistent historical resistance level of $ 90, which may be a trigger for the “bears” who have watched the price behavior of Dash from the outside. At this point, the RSI will also enter the overbought area and will be perceived by most retail traders as a sell signal.

We forecast that DASH will reach the $ 90 limit and then recover to $ 80-75 as part of the consolidation. The price may even drop dramatically occasionally during the “stop loss hunt”. Buying Dash at these times will be the most appropriate strategy.

Montero shows good dynamics

Sebastian Kurz, the Chancellor of Austria, announced that the government intends to track citizens infected with the COVID-19 coronavirus using location data from their smartphones. Those who do not own a smartphone will be provided with a special digital keychain that will perform the same function. This is not the first such initiative, as the authorities of Italy, China, Vietnam and Israel have already implemented such measures. The rationale for this measure is that it will provide an effective method for tracking people infected with COVID-19.

Monero (XMR), has recently shown very good results in terms of profitability. Cash (ZEC) and Grin (GRIN) also showed good dynamics last week, with XMR being the best of these cryptocurrencies, showing an increase of 22.24% over the specified period.

Monero also showed fantastic results against the us dollar, up 16.4%, bitcoin, up 4.3% , and Ethereum, up 3.72%. Moreover, Monero outperformed Ethereum by 26% over the previous 30 days, which puts this altcoin in the cohort of pioneers after the apocalyptic collapse of the cryptocurrency market.

Another leap to full recovery

Traders should already start developing their long-term strategies regarding Monero, as this cryptocurrency can currently rise by a couple of positions in 2020. All that is needed now for XMR to start a bullish trend is a strong confirmation signal. The preliminary signal is already there – the weekly chart shows the “morning star” model, formed against the background of a large volume of purchases for three consecutive weeks, significantly exceeding sales in January and February.

Trading volume is currently declining, which is absolutely normal, as we expect the recovery to begin after this week’s close. If the first pullback candle and the next one after it closes above the current bullish candle or 45.5 dollars, against the background of declining trading volume, we can expect a breakout to 60 dollars with subsequent consolidation in the range of 50-60 dollars.

On the daily chart, we can see that the pullback has already started, but please note that it is part of the second “bullish flag”, which also needs to be broken up to confirm the bullish intentions of the crypto market.

The previous pullback lowered the price to $43, which is 30% lower than the initial price fluctuation. This time, our pullback target is set at $ 48, after which the price should reach $ 60, after which XMR can enter a period of consolidation.