Unless my groovy shades are playing tricks on my mind, I’m seeing a couple of neat chart patterns on these cryptocurrencies. Check ’em out before they break out!
Bitcoin seems to be gearing up for another big rally as price is forming an inverse head and shoulders on its 4-hour time frame. Now that gives me a sense of déjà vu as bitcoin just broke out from a smaller reversal pattern a few days back!
Price has yet to surge past the neckline around the $11,000-12,000 area before confirming the potential uptrend, though. Bulls could get an extra dose of courage from the fresh upward crossover by the 100 SMA, which suggests stronger buying pressure.
However, stochastic is already indicating overbought conditions or exhaustion among buyers for now.
Ethereum is slowly crawling higher, forming higher highs and higher lows inside a rising wedge pattern. Price is currently testing the resistance and technical indicators are hinting at a potential upside break.
The 100 SMA may be below the longer-term 200 SMA for now, but the gap is narrowing to signal a likely upward crossover. At the same time, stochastic is pulling higher to draw more buyers in, even without hitting oversold levels.
A test of the wedge support could also find another floor at the 100 SMA dynamic inflection point, which reduces the odds of a downside break. Better wait for a move past the $900 mark before hopping in a long position!
Litecoin has been trending higher inside an ascending channel but is still making up its mind on whether to bounce or break from support. The short-term moving average is close to the bottom of the channel and $200 major psychological level, adding an extra layer of support.
Also, the 100 SMA is above the longer-term 200 SMA, which suggests that bulls have the upper hand, but stochastic is heading south so price could follow suit.
If the oscillator reaches oversold territory and turns back up soon, litecoin could still recover to the channel resistance or at least the mid-channel area of interest at $250.
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!