After their recent rallies, bitcoin and its buddies are stuck in triangle consolidation patterns. Is this the calm before the storm?
Bitcoin is stuck in what I’d like to call triangle-ception as it consolidates inside a small symmetrical triangle around the resistance of another triangle formation.
A break below the short-term triangle bottom could send it down to the longer-term triangle support around $7,400 while a move past the top could signal that bulls are back in the game.
However, stochastic is pointing down to suggest that sellers have the upper hand. At the same time, the 100 SMA is currently below the longer-term 200 SMA to hint that support is more likely to break than to hold.
Ethereum could also be in for a big break as it inches closer to the end of its symmetrical triangle consolidation pattern. Price is currently testing resistance and a break above the $260 level could be enough to set off a climb that’s the same height as the triangle.
The 100 SMA is above the longer-term 200 SMA to show that bullish momentum is still present, but the gap between the indicators has narrowed to reflect a slowdown. Stochastic has also turned lower from the overbought zone to show that bearish pressure is present.
Litecoin appears tired from its climb as it forms a head and shoulders reversal pattern on its 1-hour chart. Price is hovering just above the neckline, and a break below this support around $90 could lead to a slide of the same size as the formation.
Stochastic is pointing down to show that sellers have control at the moment while the 100 SMA is below the 200 SMA, also suggesting that the path of least resistance is to the downside.
XRP made a strong long-term bullish break earlier on but is back to consolidation mode as it formed higher lows and lower highs in a triangle pattern. Stochastic is also cruising sideways to reflect this range-bound movement.A breakout could happen in either direction, but the 100 SMA is below the 200 SMA to hint that bears might have the upper hand. Still, both moving averages line up with the triangle support to add to its strength as a floor.
In any case, watch out for a rally or selloff that’s around the same size as the triangle pattern!
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!