I’m seeing some potential retracement plays on the crypto charts this week! But could the ongoing trends be in for reversals, too?
Bitcoin has been on a tear these days as price is pulled closer to an area of interest visible on the daily time frame. Now, I hate to be the bringer of bad news for bulls, but this area might keep gains in check!
You see, the $6,000-6,500 region lines up with a former support zone and the 61.8% Fibonacci retracement level on this long-term chart. Stochastic is already hanging around the overbought level, so turning lower could mean that sellers are back in the game.
Then again, the 100 SMA appears to be attempting to cross above the 200 SMA, possible encouraging more bulls to charge once the crossover is completed.
Ethereum busted through the top of the short-term descending channel we were watching last week, indicating that a reversal from the downtrend might follow.
Price hit a roadblock just below the key $200 level, though, and a retracement is underway. The Fib tool reveals that ethereum is finding support around the 50% level and former short-term resistance near the broken channel top.
Stochastic has a bit of room to head lower before reaching the oversold region, so the pullback could still keep going. Meanwhile, the 100 SMA is above the 200 SMA to suggest that support is more likely to hold than to break.
Litecoin appears to be having trouble extending its climb as it formed a head and shoulders pattern on its 1-hour time frame. Price also seems to have broken below the neckline support already, which means that sellers have the upper hand.
The 100 SMA is above the 200 SMA for now to hint that there’s still a chance for bulls to take control, but price has tumbled below the 200 SMA dynamic inflection point. Stochastic also has some room to head lower, so litecoin price might follow suit while bearish pressure is in play.
XRP is still chillin’ like a villain around the top of the descending channel we’ve been eyeing for quite some time. A tiny triple top pattern seems to have formed, suggesting that the selloff could resume once the .3100 neckline is broken.
Stochastic is turning up from the oversold region, though, so buyers might get back into action from here. At the same time, the 100 SMA is above the 200 SMA to hint that bullish pressure could still bust through the channel top.
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!