Bitcoin and its buddies saw some red over the past few days, but it looks like bulls are still defending support levels. Check out these upside gaps!
Bitcoin pulled back to the area we were eyeing last week, and it looks like support is holding like a boss. Price even gapped higher after the bounce, suggesting that bulls rushed in to defend the key $4,000 mark.
Sustained bullish momentum could take bitcoin up to the next targets at the Fibonacci extension levels. The 61.8% Fib is closest to the swing high, which might be a take-profit point, while the full extension is past the channel resistance.
However, the 100 SMA is still below the 200 SMA to indicate that the path of least resistance is to the downside or that support could still be broken. In addition, stochastic reached the overbought zone to reflect exhaustion among buyers.
Ethereum is still in selloff mode but has been able to rebound from the channel support at the $133.00 level. Price is retracing to the Fibonacci levels, possibly gearing up for a test of the 50% Fib at the channel top.
This coincides with the 100 SMA dynamic resistance, which is below the 200 SMA to confirm that the selloff is more likely to resume than to reverse. Stochastic has some room to climb, so ethereum could follow suit until overbought conditions are seen.
If any of the Fibs keep gains in check, price could drop back to the swing low or all the way down to the bottom of the channel. A break above the moving averages and area of interest, on the other hand, could mark the start of an uptrend.
Litecoin also seems to be in correction mode but might have enough momentum to break past its descending channel resistance. After all, price just formed a long bullish candle followed by a gap up to show that bulls are charging!
The 100 SMA also seems to be going for a bullish crossover to signal a potential reversal. Stochastic is pointing up as well but is also hitting the overbought zone to show exhaustion.
The gap could still get filled, allowing the 61.8% Fib and channel top to hold as resistance and lead price to fall back to the nearby support zones around the mid-channel area of interest, swing low, and channel support.
XRP tumbled below the symmetrical triangle support to confirm that sellers have taken the upper hand. Price looks ready for a pullback, though, as the .3000 major psychological level drew some buyers in.
Applying the Fib tool on the latest drop shows that the 38.2% level lines up with a former support zone around .3200. This also coincides with the 100 SMA dynamic resistance while the 50% Fib is closer to the 200 SMA.
A larger correction could last until the 61.8% level or broken triangle bottom, but stochastic is already closing in on the overbought zone to hint that sellers are ready to return soon.
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!