Leading RoboForex analyst Dmitry Gurkovsky discusses the potential scenarios for Bitcoin’s price movement and several popular altcoins.
Cryptocurrencies continue to correct near key support levels. A breakdown below these areas could signal an even deeper correction for the entire market. However, if buyers can show some strength and prices manage to bounce, the odds of a continued rise become much higher.
Moreover, on lower timeframes for some assets reversal patterns are forming in favor of upward movement, so it will also be very important to see a breakout of the upper bounds of these patterns. Only in this case can we confidently speak of another phase of growth in the cryptocurrency market.
Bitcoin
On the daily chart Bitcoin prices remain above the $10,000 support level, while the resistance region near $11,000 has not been breached.
Uncertainty persists on both sides. On one hand, the key support has held and there is potential for further upside. On the other — bulls’ reluctance to sustain above $11,000 points to some weakness among buyers.
On the RSI indicator, a reversal pattern “Head and Shoulders” is forming, indicating upside potential from current levels. Confirmation of price growth would be a break of $11,200, as well as a breakout of the Neckline on the indicator’s chart.
A break below $10,000 with prices staying below would negate the bullish scenario, and one would expect a continuation of the decline toward $7,000 BTC/USD.
Here the bullish “5-0” pattern is expected to complete, and if there is a rebound from the pattern’s lower boundary, one can safely speak of another attempt to push through a local high with the price reaching $14,000 and above.
Daily chart BTC/USD from TradingView.
On the 4-hour chart there is also potential for forming a reversal pattern inverted “Head and Shoulders”. The right shoulder is currently forming, and there are prerequisites to see growth from current levels. To complete the figure it is important to wait for a breakout of the Neckline with the price above $10,800.
An additional signal is a rebound from the RSI’s 30 level, where similar declines previously triggered price growth in BTC/USD.
A breach of a local minimum with the price below $10,105 could negate this scenario, signaling continuation of the decline toward $9,500 and $8,975.
4-hour chart BTC/USD from TradingView.
Ethereum
ETH/USD on the daily chart continues to correct within an ascending channel.
The current price movement structure resembles a bullish “5-0” pattern, similar to the BTC/USD chart. Here, however, the price has approached the lower bound of the pattern, while on the Bitcoin chart there remains ample room for the price to fall to $7,000.
Therefore, a more “tight” test of the $306 level and the start of Ethereum’s price movement upward should not be ruled out.
A good signal for this scenario would be a breakout of the downward trend line on the RSI indicator. And a confident breakout of the upper boundary of the downward channel with the price above $415 would indicate a full resumption of the bullish trend.
A breach of the lower boundary of the ascending channel with prices below $250 would negate this scenario, after which one cannot rule out declines to $150 and lower.
Daily chart ETH/USD from TradingView.
On shorter timeframes, the price is declining, but the current structure can be seen as a reversal pattern “Double Bottom”. Therefore, with a break of the $397 level, one can expect a confident rise toward $490 within the pattern’s completion.
An additional signal is the RSI dropping below the 30 level — earlier similar moves preceded the end of the decline.
A breach of the support region with prices staying below $300 would negate this bullish scenario, and we cannot rule out declines toward $250.
4-hour chart ETH/USD from TradingView.
Litecoin
Litecoin prices on the daily chart remain above the support area at $39. The current price structure still resembles a Head and Shoulders pattern, with the right shoulder expected to complete at $51.
Many authors and enthusiasts of technical analysis recommend starting to buy already during the pattern’s formation, but if in our case prices break the support and stay below $38, the full structure should not be expected, as the Neckline would have a “wrong” slope.
A breakout of the $50-55 zone could trigger a continuation toward $64, signaling further growth to above — to $76. A good signal for an upside move would also be a breakout of the downward trend line on the RSI.
Daily chart LTC/USD from TradingView.
On the 4-hour chart there is potential for forming a reversal pattern “Wedge”. If its upper boundary breaks with the price above $50, consider the start of the pattern’s development toward above $70.
A strong signal for this scenario would also be a breakout of the RSI’s downward resistance line.
A bullish scenario would be negated by a break of the support region with prices below $39, in which case we would likely see declines toward $35 and below.
4-hour chart LTC/USD from TradingView.
TRON
On the daily chart TRON quotes remain within an ascending channel.
Here, too, a bullish pattern “5-0” is forming, similar to those seen on the BTCUSD and Ethereum charts. Therefore, in case of a successful rebound from the lower boundary of the pattern, consider continuing to rise toward a target around $0.0450.
An additional signal is the proximity of the RSI support line. Its close testing has not happened yet, but there is room for a decline to test the lower boundary of the ascending channel.
A break of the support area with prices below $0.0210 could trigger stopping the pattern and lead to further declines toward $0.0110.
Hourly chart TRON/USD from TradingView.
EOS
The EOS cryptocurrency on the daily chart continues to correct, but buyers manage to hold the support area. Moreover, there is another bounce off the RSI trend line, so there is every chance to see a price rise to the $3.17 level.
A breakout of this level would indicate the continuation of the asset’s growth toward the upper boundary of the descending channel — $3.95.
In the case of a negative scenario for buyers and a breakout of the $2.21 level, one can consider further declines toward $1.40.
Daily chart EOS/USD from TradingView.
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