Consolidation is the name of the game for bitcoin and most of its peers again! Better mark these key inflection points if you’re waiting for breakouts like I am.
Bitcoin is taking its own sweet time thinking about whether to break past the neckline of the reversal pattern we spotted last week. With its lower highs and higher lows, price is now consolidating inside a symmetrical triangle pattern.
So which way might it break out? The 100 SMA is above the longer-term 200 SMA to suggest that resistance is more likely to break than to hold, possibly sending bitcoin up by the same height as the triangle pattern.
However, stochastic looks ready to turn south after a brief stay in the overbought zone, suggesting that bears aren’t about to back down without a fight.
Ethereum is forming a triangle pattern of its own, but this one’s an ascending type as price formed higher lows and found resistance around $163.60.
A test of support and the 200 SMA dynamic inflection point is currently underway, but the fact that the 100 SMA is higher signals that a bounce back to the top might be due.
At the same time, stochastic is closing in on the oversold region to reflect exhaustion among sellers. Turning higher would confirm that buyers are taking over and could keep losses at bay.
Litecoin is on slightly stronger footing as it was able to break past the neckline of the inverse head and shoulders from the previous week. Price is now on a steady climb inside an ascending channel seen on the 1-hour chart.
A pullback to support might be due as litecoin tests the channel top, and applying the Fib retracement tool shows where buyers might be waiting. In particular, the 61.8% level is close to the channel bottom, former short-term resistance, and the 200 SMA dynamic inflection point.
Stochastic is heading south to show that sellers are in control and could allow the correction to go on. Then again, the oscillator is approaching the oversold region to suggest a shift in power soon.
XRP is also in consolidation mode as price has been forming lower highs and higher lows since late last year. Another bounce off the resistance just took place, so price could be aiming to test the bottom around the .3650 mark again.
However, the moving averages appear to be holding as near-term support around the middle of the triangle and could draw some buying energy. After all, stochastic is starting to turn higher without hitting oversold levels, hinting that bulls are eager to charge again.
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!