Consolidation, consolidation everywhere! I’m seeing some triangles, wedges, and ranges on the charts of bitcoin and its buddies.
Which way will these cryptocurrencies break out?
Bitcoin has been slowing things down a bit while hanging around the bottom of its descending triangle pattern on its 4-hour time frame. A breakout could be due soon as the consolidation keeps getting tighter and tighter.
Technical indicators are giving mixed signals, though, as the 100 SMA is below the longer-term 200 SMA to suggest that a downside break is more likely to happen. The shorter-term moving average neatly coincides with the triangle top to add another layer of resistance, too.
Stochastic, on the other hand, is hinting at a pickup in bullish pressure as it pulls up from the oversold region. Better wait for a move below $6,375 or above $7,450 to gauge longer-term direction!
Ethereum barely gained any traction after its upside break from the trend line and double bottom neckline last week. Price could keep cruising sideways in this range if resistance holds again.
Stochastic is already indicating overbought conditions and looks prime for a move back south, but the 100 SMA just crossed above the longer-term 200 SMA to signal that bulls are getting the upper hand.
A break past the current levels could sustain the potential uptrend, which might last by the same height as the rectangle pattern. On the other hand, if the top of the range keeps gains in check, another test of support could be in the cards.
Litecoin has slowed down on its dive from the earlier weeks but is also stuck inside a descending triangle pattern on its 4-hour chart, just like bitcoin.
Price is also hovering around support, still deciding whether to make a bounce or a break. Stochastic is suggesting that bulls could win out as the oscillator is starting to crawl up from oversold levels, but the moving averages are still reflecting the presence of bearish pressure.
A move below $113.50 could be enough to confirm a downside break while a rally past $123.00 could indicate that buyers are in control.
Ripple is also in a triangle consolidation pattern and is just about to test the resistance. This might still keep bulls at bay since stochastic is already hitting overbought levels and looks ready to head back down, possibly leading to another test of the triangle support.
The moving averages are also reflecting the presence of bearish pressure, but Ripple is approaching the peak of the triangle so a breakout could also be due soon.
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!