Bitcoin and its buddies still can’t seem to shake off the bearish vibes as the cryptocurrency industry has been in a somber mood for a while. Another set of bearish signals in the works?
Bitcoin looks poised for another leg lower after recently having bounced off the top of its descending channel on the 4-hour time frame. A break below its current levels could send it tumbling down to the bottom near $6,000!
Price is now testing the key support around $10,000, which bulls keep trying to defend. Stochastic is indicating oversold conditions once more and might turn higher to signal a return in buying pressure.
However, the 100 SMA is safely below the longer-term 200 SMA on this time frame to confirm that the downtrend is more likely to resume than to reverse. Also, the 100 SMA lines up with the channel resistance to add to its strength as a ceiling.
Ethereum is testing the line in the sand for its current uptrend as it sits on the bottom of the ascending channel support that coincides with the 200 SMA dynamic inflection point.
A bounce off this level could take price back up to the resistance at $1,300 or at least halfway there, with the middle of the channel also holding as an area of interest. Stochastic is pulling up from the oversold region, which means that sellers are taking it easy for now.
A break below the $1,000 mark could be enough to spur a longer-term selloff, but bears could stay holed up while the 100 SMA remains above the longer-term 200 SMA.
Litecoin busted through the bottom of its symmetrical triangle consolidation pattern were were watching earlier, indicating that more losses could be in the cards.
The 100 SMA is slightly above the longer-term 200 SMA but can’t quite seem to hold on to its lead. Stochastic is pulling higher, though, so a retest of the broken triangle support near the moving averages could take place before more sellers join in.
Note that the triangle pattern spans $150 to $225 so the resulting selloff could be of the same height.
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!