It looks like bearish action is picking up for bitcoin and its buddies as most coins are trading in channels. Will there be an end to the crypto slide soon?
Bitcoin has formed lower highs and lower lows to trade inside a descending channel on its 4-hour chart. Price seems to be finding resistance at the mid-channel area of interest and could resume the slide from here.
Applying the Fibonacci extension tool on the pullback shows that the 61.8% level is close to the channel bottom around $8,500. Stronger selling pressure could take bitcoin down to the full extension close to the $7,000 mark.
The 100 SMA is just starting to cross below the 200 SMA to hint that the selloff is more likely to gain traction from here, but stochastic is already indicating oversold conditions.
Ethereum is also trending lower inside a descending channel on its 1-hour time frame and is just bouncing off the resistance. A continuation of the drop could take it down to the channel bottom near the $200 mark.
The 100 SMA is still above the 200 SMA, though, so the path of least resistance is to the upside. In other words, there’s still a chance for price to break past the channel top and go for a reversal.
However, stochastic looks ready to head south after coming close to the overbought region, which suggests that sellers are excited to return.
Litecoin is also heading south as it turned upon hitting the resistance at the descending trend line on its 4-hour time frame. Price is inching close to the 38.2% extension at $87.260 where sellers might book profits.
Stochastic is already indicating oversold conditions or exhaustion among bears, and turning higher could signal that buyers are back. However, the 100 SMA is safely below the 200 SMA to indicate that the downtrend is likely to carry on.
XRP is also heading south as it found resistance at the top of its descending channel on the 4-hour time frame. Price could slide back to the downside targets marked by the Fib extension tool from here.The 38.2% level lines up with the swing low while the 50% level is closer to the mid-channel area of interest, which might also hold as support. Sustained selling pressure could take XRP down to the 61.8% level at 0.2631 or the full extension at 0.2153.
However, the 100 SMA is above the 200 SMA to suggest that resistance is more likely to break than to hold while stochastic has a bit more room to climb before reflecting overbought conditions.
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!