Cryptocurrencies slumped back in the red over the past week, retreating from their earlier strong rallies to record levels.
Check out this ranking of bitcoin and its buddies for the past seven days:
Bitcoin was previously cruising inside an ascending channel visible on the 4-hour time frame and just recently crashed below support.This suggests that bears might be taking over but could need a quick pullback before heading further south. Stochastic is still pulling up from the oversold region after all, and the 100 SMA is above the 200 SMA for now.
Applying the Fib tool on the breakdown shows where sellers are likely waiting. The 50% Fib lines up with the broken channel support around $11,600 and is also near the 200 SMA dynamic inflection point. If this holds as resistance, bitcoin could find its way back to the swing low soon.
Ethereum busted its way out of a symmetrical triangle consolidation pattern, and the break lower shows that sellers have won the upper hand.A selloff that’s the same height as the chart pattern could be in the works, but it seems that bears need to gather more energy. Stochastic is heading higher to hint that buyers are taking over while sellers take a break.
The 100 SMA has crossed below the 200 SMA to confirm that the downtrend is likely to gain traction, though, so sellers might simply be waiting around the Fibs. In particular, the 61.8% retracement level could be a prime entry point for bears since it’s close to the broken triangle bottom.
Litecoin is also in correction mode as price is bouncing off the bottom of a falling channel seen on its 1-hour chart.A pullback to the channel resistance, which lines up with the 61.8% Fibonacci retracement level, might be in the works. Sellers are likely keeping close tabs on this area since it lines up with a broken support zone that might hold as resistance.
The moving averages just completed a bearish crossover to confirm that resistance levels are more likely to hold than to break. At the same time, these indicators are close to the channel top to add extra upside barriers.
XRP is also making a bearish correction inside a descending channel and is already closing in on the nearest ceiling at the 38.2% Fib. This lines up with the mid-channel area of interest, so there could be plenty of bears waiting right here!A larger correction could make its way up to the channel top near the 61.8% Fib and 100 SMA dynamic resistance. The area of interest that coincides with the 50% level might also draw more sellers in.
If any of these are able to keep gains in check, XRP could make its way back down to the swing low or channel support. After all, the 100 SMA already crossed below the 200 SMA to confirm that the selloff is more likely to resume than to reverse.
Just be warned, there is a considerable amount of risk in trading cryptocurrencies due to their inherent volatility and sensitivity to headlines. Be careful out there!