Bitcoin and its buddies took a sharp dive this week, breaching several tech levels and putting HODL skills to the test. Is this a chance to buy on dips?
Bitcoin broke through the $13,000 floor on its nth attempt, leading prices to drop it like it’s hot all the way down to the $10,000 levels. The 100 SMA is below the longer-term 200 SMA to indicate that the selloff might carry on from here.
Analysts say that crackdown jitters are to blame for the slump as authorities in China and South Korea have been trying to curb bitcoin trading activity in their countries.
As it turned out, some bulls were waiting to buy around the $10,000, leading to a bounce back to $11,000 as selling pressure faded. However, this rally could be short-lived as the broken support lines up with a descending trend line and the 61.8% Fib.
Ethereum also failed to sustain its climb after a bearish divergence and a bit of a double top materialized last week.Price broke through its rising trend line and the $1,000 mark on this week’s wave of cryptocurrency selling, but stochastic is suggesting that a bounce is in order.
Zooming out to longer-term time frames also shows that major inflection points are still holding. Where my whales at yo?
On this 4-hour time frame, the 100 SMA is safely above the longer-term 200 SMA and is widening its lead to show that bulls are going strong. Stochastic is pulling up from the oversold zone as well.
Litecoin is also in selloff mode, but this isn’t really anything new as price has already been trading in a descending channel since mid-December.
A move back up to the top of the channel seems to be in order as stochastic is also heading north. This resistance might continue to keep gains in check as the moving averages are indicating the presence of bearish momentum.
Is it time to panic yet or should you just ride out the volatility? Some of the previous crashes have also been pinned on regulatory crackdowns, but as my buddy Dr. Pipslow advised, the key to surviving volatility and pullbacks is smart entry techniques and proper risk management.
A bit of fair warning, though. There is a considerable amount of risk in trading cryptocurrencies due to their inherent volatility and sensitivity to headlines. Be careful out there!