Cryptocurrencies might be losing their luster as bitcoin and most of its peers are in the red, with the exception of ETH. What’s up with that?
Check out this ranking of bitcoin and its buddies for the past seven days:
Bitcoin seems to be in correction mode as price has retreated from its latest climb. Its rising channel bottom is holding as support, and price looks ready to resume its rally.
On the 4-hour time frame, bitcoin is already moving above the mid-channel area of interest and might be setting its sights on the channel top around $10,800.
The 100 SMA is safely above the 200 SMA to confirm that the uptrend is likely to carry on while stochastic is heading north, so price could keep following suit until overbought conditions are met.
Ethereum is inching closer to testing the neckline of its huge double bottom on the daily time frame, likely confirming that a long-term uptrend is due soon.
However, stochastic is already indicating overbought conditions and looks ready to turn lower to signal that sellers are taking over. At the same time, the 100 SMA is still below the 200 SMA to suggest that resistance is more likely to hold than to break.
Litecoin recently fell through its rising trend line support to hint that a downtrend might follow. Price has since pulled up for a retest of this trend line, which is now holding as resistance.Stochastic is suggesting that sellers could take over from here while the bearish crossover by the moving averages supports this view.
In that case, litecoin could tumble to the support levels marked by the Fibonacci extension tool. The 61.8% level could be a strong take-profit point as it lines up with the swing low, but stronger selling pressure could still take it down to the full extension at $63.265.
XRP also busted through its short-term rising trend line to signal that a reversal is underway. Applying the Fibonacci extension tool shows the next potential downside targets.
In particular, the 38.2% level is close to the swing low and could be a strong support area. Stronger bearish momentum could drag XRP down to the 61.8% level at .2557 or all the way to the full extension at .2266.
The 100 SMA looks ready to cross below the 200 SMA to indicate that sellers are taking the upper hand. Also, stochastic is starting to head south from the overbought zone, so price could follow suit.
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!