I’m still keeping close tabs on a couple of crypto chart patterns on bitcoin and litecoin while spotting a potential ethereum trend pullback on my radar.
Bitcoin bulls seem to have charged past the neckline of the inverse head and shoulders pattern from the previous week, confirming that further gains are underway.
However, buying momentum appears to be slowing as price has retreated back to the broken resistance, possibly for a quick retest. After all, this is right smack in line with the 100 SMA dynamic inflection point, which adds to its strength as support.
Also, this short-term moving average is increasing its lead from the longer-term 200 SMA to show that the path of least resistance is to the upside. At the same time, stochastic is showing that sellers are starting to get exhausted and may let buyers take over soon.
Ethereum is trending lower and has recently tumbled below support around $850 to hit a low of $803.30. Price is bouncing off this area, though, and looks prime for a pullback to nearby resistance levels before resuming the drop.
Applying the handy-dandy Fib tool on the latest swing high and low shows that the 61.8% level is close to the broken support and descending trend line connecting the latest highs.
The 100 SMA is below the longer-term 200 SMA to confirm that the selloff is more likely to ensue than to reverse. However, stochastic has plenty of room to climb, which means that the correction could go on for a while.
Litecoin has broken below the channel support from the previous update but is now hesitating to fall further as it consolidates inside a descending triangle pattern.
Price is currently testing support while stochastic is turning higher from oversold levels, which suggests that a bounce back to resistance is due. Note that the top of the triangle lines up with the moving averages, so there could be some dynamic resistance right there.
A breakout in either direction could lead to a rally or a selloff that’s the same height as the chart formation so better keep your eyes peeled, fellas!
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!