The S&P 500 plunged 5.89% on June 11, its fourth-worst fall this year. This brought back memories of the sharp sell-off seen in March when investors dumped most asset classes as the coronavirus pandemic took hold.
The Organization for Economic Co-operation and Development said in a report that governments should prepare for a possible second wave of coronavirus cases. The OECD heavily emphasized the continuance of ultra-accommodative monetary policies and higher public debt until inflation and economic activity picks up and unemployment levels fall.
Daily cryptocurrency market performance. Source: Coin360
During the current crisis, the U.S. debt has crossed the $26 trillion mark. As the central banks balance sheets continue to balloon, several institutional investors may consider investing in higher risk assets like Bitcoin to hedge their portfolio against future currency crises.
If the second wave of coronavirus is as bad as medical experts predict, the short-term panic selling in cryptocurrencies cannot be ruled out but lower levels are likely to witness strong buying by long-term investors.
Bitcoin (BTC) broke above the resistance line of the symmetrical triangle and reached the five-figure mark on June 10. However, $10,000 again proved a stiff hurdle to cross as the price turned down sharply on June 11.
BTC/USD daily chart. Source: Tradingview
This suggests that the bears are aggressively defending the overhead resistance zone between $10,000 and $10,500.
The bulls held the 50-day simple moving average ($9,177) on June 11 and managed to keep the BTC/USD pair inside the triangle. However, buyers are struggling to push the price above the 20-day exponential moving average ($9,529).
If the pair turns down from the 20-day EMA and breaks below $9,078.96, a decline to $8,130.58 is possible. If this level cracks then the pair could start a new downtrend.
On the other hand, if the bulls can scale the price above the 20-day EMA, another attempt to climb the $10,000–$10,500 zone is likely. If successful, the pair is likely to pick up momentum and start the next leg of the sustained uptrend.
Ether (ETH) broke above the $247.827 resistance on June 10 and 11 but failed to sustain it. This attracted profit booking that dragged the price back below the support line of the ascending channel on June 11.
ETH/USD daily chart. Source: Tradingview
The bulls again purchased the drop to the uptrend line, which makes this an important support to watch closely.
Currently, the bulls are attempting to push the second-ranked cryptocurrency on CoinMarketCap back into the ascending channel. If successful, a rally to $253.556 is possible.
Conversely, if the ETH/USD pair plunges below the uptrend line it will signal a possible change in trend.
The sharp drop in XRP was arrested at the support line of the symmetrical triangle on June 10. This is a positive sign as it shows that the bulls are defending this support aggressively. They will now attempt to push the price back to the downtrend line of the triangle.
XRP/USD daily chart. Source: Tradingview
A breakout of the downtrend line will be a positive sign and it could offer a buying opportunity to the traders.
Above the triangle, the third-ranked cryptocurrency on CoinMarketCap can rally to $0.235688 and then to the pattern target at $0.2707.
However, if the XRP/USD pair fails to sustain the rebound, the bears will try to sink the price below the triangle. If successful, a drop to $0.16 and then to $0.14 is likely.
Bitcoin Cash (BCH) broke above $255.46 on June 10 but could not scale above the $260 level. This resulted in profit booking by short-term traders and the price plunged back below the moving averages.
BCH/USD daily chart. Source: Tradingview
The bulls are currently attempting to push the fifth-ranked cryptocurrency on CoinMarketCap back above the moving averages. If successful, a rally to $255.46 is possible. The BCH/USD pair is likely to show strength above $260 and pick up momentum above $280.47.
Conversely, if the pair turns down from the moving averages, the bears will try to sink it to the next support at $217.55. If this support holds, the pair might remain stuck between $217.55–$255.46. If the $217.55 level cracks the pair can drop to $200.