Bitcoin and its buddies just can’t catch a break! I’m looking at a mix of short-term and long-term time frames to spot potential support zones.
Any chance of seeing big bounces soon?
Bitcoin sellers had been lurking at the area of interest we were watching last week, allowing it to hold as resistance. With that, price could be headed to the Fibonacci extension levels from here.
In particular, the 50% extension could serve as near-term support since it lines up with the swing low near the $5,800 level. Stronger selling pressure could take it down to the 61.8% extension near $5,700 or the full extension at $5,300.
The 100 SMA is safely below the longer-term 200 SMA to signal that the path of least resistance is to the downside or that the drop could carry on. Stochastic is also pointing lower, although the oscillator is nearing oversold conditions.
Ethereum was unable to sustain its bullish moves last week, setting its sights on the longer-term descending triangle bottom instead.
The 100 SMA is below the longer-term 200 SMA to confirm that bearish momentum is in play, and that a break of support might be possible. On the other hand, if support holds, ethereum could still be able to bounce back to resistance around $565 and the 100 SMA dynamic inflection point.
Stochastic is on the move down but is approaching oversold levels to signal exhaustion among sellers. If bullish energy picks up from here, ethereum might even try to break past the triangle top and establish an uptrend.
Litecoin seems eager to resume its selloff as it hit resistance at the mid-channel area of interest. Stochastic is also heading south so price could follow suit until the swing low or channel support near $70.
But until price forms new lows, the Fib correction levels could still be valid and a larger pullback might be in the cards. In particular, the 61.8% level at the channel resistance looks like a prime retracement area.
In any case, the 100 SMA is below the longer-term 200 SMA on this time frame to confirm that the downtrend is likely to resume. The widening gap also suggests that bearish momentum could pick up.
IOTA has been one of the weaker altcoins recently as it was unable to join its peers in larger rallies last week. Price is in a steady descending channel on the 1-hour time frame and is just coming off a test of resistance near the 100 SMA dynamic inflection point.
Applying the Fibonacci extension tool shows the next downside targets at 0.88 and 0.77 below the channel support. However, stochastic is starting to pull up from oversold levels to suggest a quick bounce.
Ripple sellers are at it again as price is starting to break below the long-term descending triangle bottom around 0.4600. The 100 SMA is just close by to hold as a ceiling in the event of another quick bounce.
This short-term moving average is also below the longer-term 200 SMA to reflect the presence of bearish momentum. At the same time, stochastic is turning lower without even hitting overbought levels, hinting that bears are eager to return.
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!