Are cryptocurrencies in for another wave lower?
Better keep close tabs on these bearish correction levels to see if more sellers hop in!
Bitcoin seems to be breaking below the bottom of its descending triangle pattern to signal that another major selloff is in order.
But can bulls still defend this level?
Stochastic seems to be suggesting a return in bullish pressure, as the oscillator is pulling up from the oversold region. If support holds, BTC could recover to the triangle top around $38,000 or even attempt an upside break.
However, the 100 SMA is below the 200 SMA on this time frame, hinting that support is more likely to break than to hold. In that case, BTC might tumble by the same height as this triangle formation!
Litecoin is trending lower on its 4-hour chart, forming lower highs and lower lows inside a descending channel pattern.
Price is bouncing off support and might be waiting for more sellers at the Fibonacci retracement levels. The 38.2% Fib is close to the mid-channel area of interest while the 50% Fib coincides with a former support zone.
A larger correction could reach the 61.8% Fib that’s right smack in line with the 100 SMA dynamic inflection point or the top of the channel.
ETH is also in consolidation mode, as price tests the bottom of its ascending triangle pattern on the 4-hour time frame.
Bulls might step up at this level since Stochastic is turning higher to signal that exhausted sellers are taking a break. This might be enough to take ETH back to the triangle top around $2,870.
However, the 100 SMA is below the 200 SMA, so bearish pressure could kick in sooner or later. Better watch out for a break below the triangle support since this could set off a drop that’s the same size as the chart pattern.
XRP is also trending lower inside a falling channel, but it looks like sellers are eager to jump back in!
The mid-channel area of interest and 100 SMA dynamic resistance are holding, so XRP could make its way back down to the bearish targets marked by the Fibonacci extension tool.
The 38.2% extension lines up with the swing low around .7250 while the 50% Fib is closer to the channel support.
If this is your first time checking out crypto charts, keep in mind that there is a considerable amount of risk in trading cryptocurrencies due to their inherent volatility and sensitivity to headlines. Be careful out there!