Consolidation is the name of the game for bitcoin and its buddies lately, as triangle patterns have formed and breakouts might be looming.
Bitcoin has formed lower highs and found support around the $9,400 mark, creating a descending triangle pattern on its 4-hour time frame. Price is heading up to test the triangle resistance that coincides with the 200 SMA dynamic inflection point.
The 100 SMA is below the 200 SMA to suggest that resistance is more likely to hold than to break while stochastic is on the move down, so bitcoin price might follow suit.
A breakout in either direction could set off a rally or selloff that’s around the same height as the triangle, which spans $9,400 to around $11,800.
Ethereum has formed lower highs and higher lows to create a symmetrical triangle pattern on its 1-hour time frame. Price is currently hovering around the bottom of the triangle and could be due for a bounce soon.
However, the 100 SMA is below the longer-term 200 SMA to signal that support is more likely to break than to hold. At the same time, stochastic is heading lower to indicate that bearish momentum is picking up.
A move below the triangle bottom around $205 could trigger a drop that’s around the same size as the pattern, which spans $192 to $235.
Litecoin is also forming higher lows and lower highs inside a potential symmetrical triangle pattern on its 4-hour time frame. Price is hanging out at the bottom of the triangle, still deciding whether to make a bounce or a break.
Technical indicators suggest that a breakdown might be in the works, as stochastic is heading south to signal the presence of bearish pressure. The 100 SMA is also below the longer-term 200 SMA to show that the path of least resistance is to the downside.
XRP is also stuck inside a symmetrical triangle consolidation pattern of its own and is currently testing the pattern resistance. Technical indicators are hinting at another move back to support around .3070.For one, stochastic is just turning lower from the overbought region to signal that selling pressure is returning. At the same time, the 100 SMA is below the longer-term 200 SMA to indicate that bears have the upper hand.
However, the gap between the moving averages is narrowing to signal weakening selling pressure and a potential bullish crossover. In that case, a break past the triangle top at .3200 could be possible, likely spurring a climb that’s the same size as the formation.
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!