Aha! Finally seeing big bounces on crypto charts these days! But are these merely corrections on longer-term declines?
Bitcoin appears to have found support at the bottom of its descending channel visible on the 1-hour time frame, setting for a potential correction to the top.
Applying the handy-dandy Fib tool on the latest swing high and low shows that the 38.2% retracement level lines up with the channel resistance around $7,800. Larger pullbacks to the higher Fib levels could also be possible, but stochastic is already indicating overbought conditions or that sellers may be ready to return.
But if bitcoin bulls are able to charge past these resistance levels, a reversal from the downtrend may be in the works. The 100 SMA appears to be closing its gap with the 200 SMA, so an upward crossover may draw more bullish pressure.
Ethereum has previously broken below support around $650 and is trading below a descending trend line so far this month.
A classic break-and-retest scenario seems to be showing up as price looks prime for a correction to the former support level, which is close to the 61.8% Fibonacci retracement level.
To top it off, this area of interest also coincides with the 100 SMA dynamic inflection point, which might add to its strength as resistance. This moving average is below the longer-term 200 SMA to confirm that the path of least resistance is to the downside.
Litecoin buyers seemed to hop back in at the bottom of the longer-term channel we were watching last week, paving the way for a bounce to the nearby inflection points.
Price is currently testing the area of interest at the 38.2% Fib and 200 SMA dynamic resistance, which is close to a descending trend line. Stochastic is turning lower from the oversold region to signal that sellers are ready to return.
A higher pullback could still find its way to the 61.8% retracement level, which also coincides with a former support zone around $130.
IOTA broke out of its falling wedge formation from earlier on, signaling that buyers are ready to take it higher. However, it could encounter pretty solid resistance at $1.85 as this lines up with the 38.2% Fib and former support.
At the same time, the moving averages are spanning this area of interest, adding more layers of resistance close to the $2.00 psychological level. Stochastic has some room to climb, though, so bulls could stay in the game for a little longer.
Ripple is also trending lower but pulling higher, with price already testing its descending trend line and nearest support-turned-resistance at the 38.2% retracement level.
To make the deal even sweeter for bears, a bearish divergence can be seen as stochastic made higher highs while price had lower highs. But if buyers continue to pile on, a break past the Fibs and next area of interest at .6500 could spur a reversal from this downtrend.
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!