Cryptocurrency bulls seem to have lost the fight as bitcoin and its peers have been sliding back down. How low can they go?
Bitcoin selling pressure returned after that bounce off the area of interest we were watching last week. Now it seems to have its sights set on the triangle support visible on the 4-hour chart.
You see, price has formed lower highs and higher lows to create a symmetrical triangle pattern with support around the $7,000 mark. Stochastic is already heading south to confirm that bears have the upper hand while the 200 SMA is holding as dynamic resistance.
The 100 SMA is still above this longer-term moving average, but the gap has narrowed enough to signal an imminent downward crossover or pickup in selling pressure.
Ethereum tumbled below that ascending trend line from last week and completed its retest, just enough to form a head and shoulders pattern.
Price has yet to break below the neckline around $650 to confirm that a downtrend is underway, but the 100 SMA is above the longer-term 200 SMA to signal that a bounce is still possible.
Stochastic is heading south from the overbought zone, though, which means that sellers are just getting heir game on. The chart pattern spans $650 to $840 so the resulting drop could be of the same height.
Monero is carrying on with its slide after previously hitting a ceiling at the top of its descending triangle on the daily time frame.
If you’re a momentum trader, you could ride this bearish wave all the way down to the bottom of the triangle, but be careful because stochastic is pulling out of the overbought zone.
If you think inflection points would hold, better wait for a bounce off the triangle support, and hop in if the 100 SMA stays above the longer-term 200 SMA.
Litecoin also broke below its uptrend channel support to show that sellers have taken the wheel and could push for more losses. Price might still make a pullback to the area of interest around the Fibs and broken channel bottom.
In particular, the 61.8% retracement level lines up with the $164 level and former channel support, which might hold as a ceiling from here. The 100 SMA is still above the 200 SMA to show that there’s some bullish momentum left, but a crossover also seems to be in the works.
Also, stochastic is already heading south while the 38.2% Fib has kept gains in check. Price could test the recent lows or even create new ones from here.
Ripple resumed its slide after hitting the retracement levels earlier on, setting its sights on downside targets marked by the Fibonacci extension tool.
The 38.2% extension lines up with the swing low, so a bounce might take place right there, especially since stochastic is already indicating oversold conditions.
The 100 SMA is still below the 200 SMA, though, so there may be enough bearish momentum left to take Ripple to the 50% extension at 0.5976 or the 61.8% extension at 0.5619.
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!