Crypto bulls seem ready to extend their stay in the markets, so I’m keeping my eyes locked on these potential pullback zones on the rallies.
Bitcoin bulls came back in full force after a bit of consolidation, confirming the bullish flag formation from the previous week. Buyers might need another break again, possibly to gather more bullish energy on a pullback as stochastic indicates overbought conditions.
Applying the handy-dandy Fib tool on the latest swing low and high shows that the 50% level lines up with an area of interest around the flag and broken triangle top. A larger pullback could last until the 61.8% level near the moving averages dynamic inflection points.
The 100 SMA is crossing above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. In other words, the climb is more likely to gain traction from here.
Ethereum also enjoyed another leg higher after a bit of consolidation, forming higher lows on top of a rising trend line on its 1-hour time frame.
A correction to this support area seems to be due, and more buyers might be waiting around the 61.8% Fib. This lines up with the 100 SMA dynamic inflection point, which is above the longer-term 200 SMA to signal that bullish momentum is in play.
At the same time, stochastic is approaching the oversold region to reflect that sellers are in control but may be exhausted soon. Turning higher could encourage buyers to jump back in and sustain the uptrend.
Litecoin continues to trend higher inside its ascending channel on the 1-hour time frame and looks prime for a pullback to support. Stochastic is still moving south after all, so price could follow suit.
The Fibonacci retracement tool shows that the 61.8% level is closest to the channel bottom and the 100 SMA dynamic support. This is safely above the 200 SMA to confirm that support is more likely to hold than to break.
A shallow pullback could already bounce off the 38.2% level to recover to the swing high or the very top of the channel.
XRP managed to catch up to its peers after being left behind in consolidation last week. Price made a sharp rally to the 0.3550 level, followed by a similarly sharp correction.
So far, price is holding above the 61.8% Fibonacci retracement level, which is just above the broken triangle resistance. Stochastic is still pointing south, so there may still be room for a larger dip before buyers get back in the game.
The 100 SMA is above the 200 SMA, reflecting the presence of bullish pressure that could take XRP back up to the swing high and beyond.
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!