I’m seeing some bounces on the crypto charts these days, but it looks like near-term resistance levels are being tested. Are we about to see breakouts soon?
Bitcoin bulls seem to be back in the game as price bounced off the triangle support and climbed above the key $10,000 level. It could be setting its sights back on the triangle top around $11,300 from here, but technical indicators suggest that gains might be limited.
Stochastic is already indicating overbought conditions or exhaustion among buyers while the 200 SMA is holding as dynamic resistance. On top of that, the faster-moving 100 SMA is below the 200 SMA to show that the path of least resistance is still to the downside.
Ethereum formed lower highs to cruise below a descending trend line on its 4-hour time frame. Price is currently testing this resistance area, which happens to line up with an area of interest and the 100 SMA dynamic inflection point.
The 100 SMA is below the longer-term 200 SMA to confirm that the selloff is more likely to pick up than to reverse. In that case, price could aim for the next downside targets marked by the Fibonacci extension tool.
The 61.8% extension lines up with the swing low and could be a take-profit point while the full extension is located at $153.28.
Litecoin might also be due to resume its slide as it tests the descending trend line and area of interest visible on its 1-hour time frame. Stochastic is already heading lower to signal that bearish pressure is picking up.
With that, litecoin could keep sliding until the swing low or 61.8% extension at $63 or all the way down to the full extension near $58. Then again, bulls might still have a shot since the gap between the moving averages is narrowing to hint at a potential upward crossover.
XRP is also testing its descending trend line resistance, but price is already trading above both moving averages to hint that a bullish breakout might be due.At the same time, the gap between the moving averages is shrinking to show that a bullish crossover might be looming.
Stochastic is turning lower without even hitting the overbought zone, indicating that bears might be eager to return. In that case, price could still make it down to the Fib extensions, particularly the 50% level near the swing low and 0.2500 mark.
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!