Finally some bullish breakouts! Can bitcoin and its buddies sustain their rallies and are there still opportunities to join in?
Bitcoin busted through the resistance of that longer-term descending triangle we’ve been watching for quite some time. Price seems to be running out of steam on its rally, though, and might need a quick pullback to gather more bullish energy.
Applying the Fib tool on the latest swing low and high on the 4-hour time frame shows that the 50% to 61.8% levels span an area of interest from $7,300-7,500. This is also within the moving averages’ dynamic inflection points.
The 100 SMA is below the longer-term 200 SMA but the gap is narrowing to hint at a potential upward crossover, which could bring more buyers in. Stochastic is heading south but approaching oversold levels, also hinting at a likely return in bullish pressure.
Ethereum bulls charged past its short-term range consolidation and finally gained some traction on its earlier trend line break. From here, price could aim for the next longer-term ceiling as shown by the Fib levels on the daily chart.
The 100 SMA is still above the longer-term 200 SMA on this time frame, so the path of least resistance is to the upside. This might be enough to take ethereum to the former support around the 61.8% Fibonacci retracement level near the $750 mark.
Stochastic is already indicating overbought conditions, though, and turning lower could draw sellers back in. The 38.2% Fib lines up with the 200 SMA dynamic resistance and might keep gains in check.
Litecoin also made a bullish break from its long-term descending triangle pattern and is now establishing an uptrend with a new ascending channel. Price just bounced off the resistance and is currently pulling back to the bottom.
This coincides with a former resistance level around $130 that might now hold a support. It also lines up with the 100 SMA dynamic inflection point, adding to its strength as a floor.
Buyers could be ready to jump back in as stochastic is indicating oversold conditions. The 100 SMA is increasing its lead over the 200 SMA to reflect strengthening bullish momentum as well.
Ripple is in another symmetrical triangle formation, which appears to be a bullish flag pattern after its recent strong rally.
The 100 SMA is safely above the longer-term 200 SMA to reflect the presence of bullish momentum while stochastic is already turning higher without hitting oversold levels. This suggests that buyers are eager to pile on long positions and possibly take Ripple up by the same height as the mast of the flag.
Better wait for a move past the .6700 level if you’re planning to jump in long or a candle close below .6500 if you’re thinking of shorting.
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!