What does this brand new trading year hold for bitcoin and its buddies? Let’s take a look at where they’re all starting off this 2019.
Bitcoin might be aiming higher from here as an even larger reversal pattern is forming on its 4-hour time frame. Price is creating an inverse head and shoulders but has yet to test the neckline around $4,400 before confirming a potential uptrend.
The 100 SMA is crossing above the longer-term 200 SMA, though, so the path of least resistance is to the upside. This suggests that the climb might be able to gain traction, possibly lasting by the same height as the reversal formation.
At the same time, stochastic is pointing up to indicate that bulls are in control of the game and could keep pushing higher until overbought conditions are seen.
Ethereum doesn’t seem to be in the mood for any downtrend reversals just yet as price is still cruising inside a descending channel on the 1-hour chart.
Price is bouncing off the Fibs near the channel resistance at $155-160 and might be due for a drop back to the swing low or the channel bottom. Stochastic is moving up but closing in on the overbought zone to signal exhaustion.
Then again, there may be some hope for the bulls out there as the 100 SMA just completed an upward crossover to hint that buying action could soon pick up.
Litecoin also looks eager for a reversal as price created an inverse head and shoulders and might be setting its sights on a neckline break.
Bulls might want to note that the moving averages completed an upward crossover while stochastic is heading north, both suggesting that buying momentum could kick into high gear.
If that happens, a break past the neckline around $37 could set off a rally that’s the same height as the reversal pattern, which spans around $23 to $37.
XRP did make it all the way up to the channel top we were eyeing late last year, and this area held as resistance as expected. With that, price might be setting its sights back down on the targets marked by the Fib extension tool.
XRP is already testing the mid-channel area of interest that is close to the 50% extension. Technical indicators like the moving averages and stochastic are suggesting that this support region might keep losses at bay.
If that’s the case, price could rebound to the channel top around .4100 and a break higher could signal a reversal. On the other hand, a continuation of the slide could take XRP down to the 61.8% extension or the full one at .2200.
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!