Support levels have been breaking down for bitcoin and its buddies these days. Are they in for another major decline?
Bitcoin might be done with its earlier climb as it formed a double top pattern. Price already broke below the neckline around the $10,000 mark to confirm that a reversal is taking place.
The 100 SMA is above the 200 SMA for now, but the gap between the indicators is narrowing to reflect slowing bullish momentum. Stochastic is heading south but already dipping into the oversold territory to signal that sellers might be exhausted soon.
Still, if the selloff persists, price could fall by around the same height as the chart formation.
Ethereum is trending lower inside a descending channel on its 4-hour time frame and is down to the very bottom. A bounce off this support could lead to a pullback to the channel top or at least until the mid-channel area of interest.
A break below the channel support, on the other hand, could spur a drop until the full Fibonacci extension around $169. The 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside or that the slide is more likely to gain traction.
However, stochastic is starting to pull out of the oversold region to show that buyers are taking over while sellers take a break.
Litecoin is also down to the bottom of the descending channel on its 1-hour time frame and might be due for a bounce off support. If so, a retracement to the top of the channel around the 61.8% Fib and area of interest could follow before the downtrend resumes.
Stochastic is in the oversold region to show that selling pressure is exhausted, so a pullback might follow from here. Still, the channel top might keep gains in check as the 100 SMA is below the 200 SMA to suggest that resistance is more likely to hold than to break.
XRP has broken below the bottom of its symmetrical triangle on its 4-hour time frame, indicating that a selloff of the same height as the formation might take place.However, stochastic is in the oversold region to signal that selling pressure is fading and that buyers could take over next. The 100 SMA is above the longer-term 200 SMA to suggest that the path of least resistance is still to the upside. Then again, the moving averages might simply be oscillating to reflect consolidation.
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!