It looks like crypto bears ain’t done painting the town red! Any chance of a rebound at these inflection points? Or are we about to see more red?
Bitcoin picked the southbound route after last week’s indecision inside a symmetrical triangle formation. Price found a bit of support around the $3,600 area, but there might be more to this selloff.
The Fib retracement tool shows that the 38.2% level is holding as resistance, which suggests that the drop might resume from here. Bears look eager to return as indicated by stochastic heading down after a brief stay in the overbought region.
A larger pullback could still reach the higher Fibs closer to the broken triangle bottom. The 100 SMA is above the 200 SMA for now to show that there’s some bullish momentum left, but the narrowing gap means a bearish crossover may be looming.
Ethereum also looks ready to carry on with its slide as it bounces off the top of the descending channel on its 4-hour chart. Stochastic turning lower confirms that sellers have the upper hand, but this could still hinge on the Constantinople upgrade.
Applying the Fibonacci extension tool shows the next potential downside targets. The 50% level is around the $92 mark at the mid-channel area of interest while the 61.8% extension coincides with the swing low. The full extension is at $17.59 below the channel support.
Litecoin is also setting its sights lower as the top of the descending channel visible on the daily time frame is holding. So much for that short-term rising channel bounce we were eyeing last week!
The 100 SMA is safely below the longer-term 200 SMA on this time frame, confirming that the path of least resistance is to the downside. Price is close to testing the 38.2% extension but might still have some room to test the 61.8% level that lines up with the swing low and mid-channel area of interest.
XRP is already down to its mid-channel area of interest on the descending channel, still deciding whether to make a bounce or a break. Stochastic seems to be suggesting that a bearish move is more likely to follow.
The 100 SMA is also attempting a bearish crossover, adding confirmation that sellers are in control. In that case, a move to the next Fib extension levels or the channel bottom near the full extension 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!