Consolidation is the name of the game for bitcoin and its buddies these days while traders wait for the next big catalyst. Which levels should you watch for breakouts?
Bitcoin formed lower highs and lower lows, creating a falling wedge pattern visible on its 1-hour time frame. Price is currently testing support and might be due for another bounce to resistance around the $12,000 level.
The moving averages are still oscillating, which suggests that bitcoin could keep consolidating for some time. However, it looks like the 100 SMA is starting to make an upward crossover while stochastic is approaching oversold levels.
These suggest that buying momentum could return, probably even leading to an upside break from the wedge. If so, bitcoin could climb by roughly the same height of the chart pattern as it reins more bulls back in.
Ethereum continues to hold steady above that long-term support zone highlighted earlier, forming a symmetrical triangle with its lower highs and higher lows.
The 100 SMA is starting to cross above the longer-term 200 SMA to suggest that bullish momentum is picking up, so keep tabs on the triangle resistance at the $1,000 psychological mark to catch an upside break.
Stochastic is still heading south, though, so there may be some bearish pressure left. A break below support around $950 could lead to a drop of around $600 or the same size as the triangle formation.
Litecoin paused from its selloff mode to form a symmetrical triangle consolidation pattern as well. Price is approaching the peak of its formation to signal that a breakout is due anytime soon.
As with ethereum, the 100 SMA is attempting an upward crossover to convince bulls to charge. Stochastic is heading south but is nearing oversold levels to signal exhaustion among sellers.
A break past the $185 level could be enough to confirm a bullish break while a move below the $170 level could indicate that further losses are in the cards.
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!