Down but not out! Bitcoin and its peers seem to be struggling to sustain last week’s gains but there’s hope for bulls yet.
Bitcoin seems to be in correction mode from its recent rally, pulling back to the broken longer-term trend line and the neckline of its double bottom.
Applying the handy-dandy Fib tool shows that this area of interest is around the 50% to 61.8% levels, spanning $6,200 to $6,300. If this area keeps losses in check, bitcoin could even form an inverse head and shoulders with the neckline around $6,850.
The 100 SMA is still below the longer-term 200 SMA but the gap is narrowing signal an imminent bullish crossover. Stochastic is also in oversold territory, which reflects exhaustion among sellers and hints at a possible return in bullish pressure.
Ethereum is still hanging around that correction zone we were eyeing last week but looks prime for a bounce off the current levels. After all, stochastic is already hitting oversold levels and could be due to turn higher soon.
Using the Fibonacci extension tool shows the potential upside targets if a bounce happens. The 38.2% extension lines up with the 100 SMA dynamic inflection point while the 61.8% level is closer to the swing high and 200 SMA dynamic resistance.
The full extension is at $516.81 and a break past this level could confirm that buyers are regaining the upper hand.
Litecoin is starting to reverse from that feeble uptrend that started last week. Price is now trading inside a short-term channel to indicate that sellers are in control.
Using the Fib tool on the latest swing high and low reveals that the 61.8% retracement level coincides with the channel resistance and a former support zone. This is also in line with the 100 SMA dynamic resistance, which is below the 200 SMA to signal that the path of least resistance is to the downside.
Stochastic has some room left to climb but is already turning lower without even hitting overbought levels.
Ripple appears to be in the same boat as litecoin, with price also forming a descending channel and testing support. A bounce back to the top could hit a ceiling at the 61.8% Fib, which lines up with a broken support around .4650 to .4700.
Stochastic is starting to move north so Ripple might follow suit. However, the 100 SMA recently crossed below the longer-term 200 SMA to show that the downtrend is more likely to resume than to reverse.
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!