So much for those support zones! Bitcoin and its buddies busted right through downside barriers as sellers wouldn’t let up.
Can cryptocurrency prices go any lower from here?
Bitcoin is down to its last line of defense as it tests the long-term floor around $6,500. This is right at the bottom of the descending triangle visible on longer-term time frames.
The 100 SMA is safely below the longer-term 200 SMA to suggest that a break is more likely to happen than a bounce back to the top around $8,000. In that case, bitcoin could be in for a prolonged slide from here.
However, stochastic is already dipping into oversold territory to show that sellers are feeling pretty tired. Crossing higher and moving up could signal that buyers are ready to return and take bitcoin back up to the triangle resistance.
Ethereum failed to break past the inverse head and shoulders neckline we were watching last week, sending price back down to resume its selloff.
In fact, ethereum is solidifying its descending channel formation visible on the 4-hour time frame and might just be ready to bust through the mid-channel area of interest. This could clear the way for a move all the way to the bottom near the $400 mark.
Stochastic seems to be having trouble pulling up from the oversold region to signal that sellers are still putting up a fight. The 100 SMA is below the longer-term 200 SMA and lines up with the channel top to add to its strength as a ceiling.
Litecoin bears are at it again, this time taking price below the long-term support at $100. This amounts to a downside break of the descending triangle support, which suggests that litecoin could be in for a prolonged slide.
At the same time, the 100 SMA completed a downward crossover from the 200 SMA to confirm that bearish momentum is kicking in. Stochastic is on the move down again but is revisiting oversold conditions, so a brief pullback might still be possible.
IOTA wasn’t able to rely on bulls to defend the nearby support areas as price made a sharp drop after the former floor held as resistance.
Applying the Fibonacci extension tool shows the next downside targets, with price approaching the 61.8% level at $1.19. Stronger selling pressure could take it all the way down to the full extension at $0.67.
However, the 100 SMA might be attempting a bullish crossover to draw more buyers to the mix. Stochastic is hanging out near oversold levels, which also hints at a potential return in buying pressure.
Ripple completed its bearish pullback to the area of interest and is now setting its sights on the Fibonacci extension levels.
In particular, the 38.2% level lines up with the swing low and is currently keeping losses at bay. A break below this area could lead to a move to the next downside targets, possibly until the 61.8% extension near the channel support.
The 100 SMA is below the 200 SMA but the gap is narrowing, so a new crossover may be imminent. At the same time, stochastic is starting to pull out of oversold territory to draw buyers in. If the mid-channel area of interest holds, Ripple might still make another test of the channel top!
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!