Were those recent rallies just too good to last? Or are these mere pullbacks for another leg higher? See for yourself with these support areas being tested!
Bitcoin hit strong resistance at the top of its freshly-forming ascending channel, which happens to line up with a longer-term falling trend line.
If the short-term channel holds as support, price could have another shot at breaking past the upside barriers around the $8,500 swing high. The 100 SMA lines up with this channel bottom after all, adding to its strength as a floor, and is above the longer-term 200 SMA to reflect bullish pressure.
However, a break lower could mean a continuation of the downtrend and a test of the Fib extension levels. The 38.2% level lines up with the 200 SMA around $6,500-$7,000 while the 61.8% extension coincides with the key support at $5,800.
Ethereum broke below that rising channel we were watching last week and has fallen sharply to the next potential support at the bottom of its range.
A bounce could still take it back to the top or at least halfway through, just enough to test the area of interest around $450. Stochastic is dipping into oversold territory after all, so a return in bullish momentum might be in the cards.
A break below support, on the other hand, could spur a drop that’s the same height as the rectangle pattern, which spans $415 to $495.
Litecoin also tumbled below its short-term ascending channel support and is making its way towards the bottom of the range visible on the 1-hour time frame.
Stochastic is already on the move up to signal that buyers are regaining control of the game, but price might still be drawn to the actual bottom. A bounce could take it back to the range resistance at $90 or until the area of interest at the middle.
Ripple is also down to the very bottom of its chart pattern as it tests the support of the descending triangle on its 4-hour time frame.
Stochastic is also pulling higher with a bit of bullish divergence since July 26, adding a bit more bullish energy that could spur a bounce back to the top.
However, the 100 SMA is still below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. The potential bullish crossover might not even be completed even though the moving averages came pretty close, hinting that bears ain’t done just yet.
If you’re looking for another option to buy bitcoin, then you might wanna consider Bitcoin Cash and this neat head and shoulders breakdown.Price is already trading way below the neckline of the reversal formation but looks ready for a retest before heading further south. The Fib tool shows that the 61.8% retracement level lines up with the broken support and 200 SMA while the 38.2% level is closer to the nearby dynamic resistance at the 100 SMA.
Stochastic is moving up but starting to hit overbought levels, so selling pressure might return at some point.
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!