Are we about to see more upside for bitcoin and its buddies? I’m serving up potential reversal setups this week yo!
Bitcoin sustained its drop after falling below that double top neckline highlighted previously, but it looks like buyers are ready to take over the ‘hood again!
Price just surged past a short-term descending trend line connecting the latest highs and might be about to bust through its current area of interest. In that case, bitcoin could move up to the next potential ceiling around the $9,000-10,000 levels and the 200 SMA dynamic inflection point.
The shorter-term 100 SMA is below the 200 SMA, though, so the path of least resistance might still be to the downside. But if bitcoin is able to clear the next couple of roadblocks, it could have enough energy to climb to the tops near $12,000.
Ethereum still seems to be in selloff mode as it trades below a falling trend line on its 1-hour time frame. Price is testing this resistance area around the 50% Fibonacci retracement and might be due for a drop.
For one, the 100 SMA is safely below the longer-term 200 SMA to signal that the downtrend is more likely to resume than to reverse. Stochastic is indicating overbought conditions and looks ready to head south, suggesting that selling pressure is about to kick in.
A larger correction to the 61.8% Fib closer to the $600 level is possible, as this area lines up with a former support and the 200 SMA dynamic inflection point.
Litecoin is showing early signs of a potential reversal from its downtrend as price is moving past the descending trend line on the 4-hour time frame.
From here, bulls have yet to charge past the 100 SMA dynamic resistance to confirm that the climb is gaining traction. However, this moving average is still below the longer-term 200 SMA and the gap between the two is widening to indicate strengthening bearish pressure.
At the same time, stochastic is hovering around the overbought region to reflect exhaustion among buyers. A quick pullback to the trend line could take place and holding as support could draw more buyers in.
Bitcoin Cash still seems to be in correction mode, just as in the previous week, and here’s a different view. Scrolling further back reveals that price is actually inside triangle pattern and is bouncing off support.
Stochastic is on the move up to show that bulls are ready to take Bitcoin Cash higher from here, but the oscillator is also closing in on the overbought zone.
This could lead to a test of the resistance around the $1,200 level, which happens to coincide with a former support zone and the moving averages. A downward crossover has just taken place, which suggests that sellers have the upper hand.
Ripple also looks ready for takeoff as price is forming what appears to be a sketchy inverse head and shoulders on its 1-hour chart. A break past the neckline around 0.7310 needs to happen before bullish momentum picks up.
The 100 SMA is below the longer-term 200 SMA, but the gap is narrowing to signal a potential upward crossover. Stochastic is turning down, though, so a move back to the nearby support areas could still be underway.
Note that the chart pattern spans 0.5300 to around 0.7300, which means that an upside break could be followed by a rally of the same height.
A bit of fair warning, though. There is a considerable amount of risk in trading cryptocurrencies due to their inherent volatility and sensitivity to headlines. Be careful out there!