Are those potential reversal signals I’m seeing or is this just wishful thinking? Check out these technical hints that the crypto bloodbath may be over.
Bitcoin bounced off its previous lows instead of creating new ones – a sign that bulls are still alive and kicking, trying to defend nearby support levels.
Price might be forming a double bottom right here but has plenty of ground to cover before testing the neckline around $4,150. It is also facing a roadblock at this potential descending triangle top, which is close to the 100 SMA dynamic inflection point at the $4,000 major psychological mark.
The short-term moving average is below the longer-term 200 SMA to confirm that the ceiling is more likely to hold than to break. At the same time, stochastic is approaching overbought levels to reflect exhaustion among buyers.
Ethereum is also seeing signs of a possible reversal with a double bottom pattern. Price is halfway through its climb to the neckline resistance at $120, and a break past this could spur and uptrend.
However, the 100 SMA dynamic resistance is just close by and price would also need to bust through this barrier to sustain its rally. Even a break past the neckline could encounter some selling pressure around the 200 SMA dynamic inflection point.
Still, the gap between the moving averages seems to be slowly narrowing to indicate weakening selling momentum. Stochastic is starting to turn lower, though, so ethereum might still follow suit.
Litecoin recently busted through the descending channel resistance we were watching last week, also signaling that it’s due for a reversal.
The 100 SMA is below the longer-term 200 SMA for now, so the path of least resistance is still to the downside. However, the gap between the two has noticeably narrowed to indicate that bears are losing their grip.
Then again, stochastic is pointing down with a slight bearish divergence to boot, which suggests that sellers might still take the upper hand. Talk about mixed signals!
XRP joined the rest of its cryptocurrency peers down in the dumps last week, breaking below the support of its symmetrical triangle consolidation pattern.
Be careful if you’re bullish on this, homies! The 100 SMA just crossed below the 200 SMA to confirm that further losses are likely. Stochastic pulling up from the oversold region could indicate that a pullback to the broken triangle bottom, which lines up with the 50% Fib, might be in the works.
Just be warned, there is a considerable amount of risk in trading cryptocurrencies due to their inherent volatility and sensitivity to headlines. Be careful out there!