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The Cryptocurrency carnage continued this week prices approaching or breaking to fresh yearly lows. While the broader technical picture keeps the focus lower, the declines are now approaching key near-term inflection levels in price. Here are the levels to know in Bitcoin, Ethereum, Ripple and Litecoin heading into the close of March trade.
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Bitcoin Daily Price Chart (Log)
Notes: Earlier this month we highlighted that Bitcoin prices had reversed, “sharply off the 2018 low-day close at 7737 (low registered at 7682) - It’s make-or-break here for the cryptocurrency near-term.” Indeed price rallied into near-term resistance at 9222 before turning lower again with the decline now attempting to break the monthly lows.
If Bitcoin prices close at these levels, the risk remains for a larger decline towards support targets at the 2018 close low at 6874, the 61.8% extension at 6492 and the yearly low / 76.4% retracement at 5921-6039. Interim resistance now stands back at 7737 with broader bearish invalidation back at 9222-9360 where the 200-day moving average converges on slope resistance.
Bottom Line: Bitcoin prices remain at risk for further losses near-term while below 7737 and heading into the April open we’ll be looking for a reaction at structural support for a possible recovery. All things held constant, Bitcoin looks like its heading lower- look for the weekly close for guidance here.
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Ether Daily Price Chart (Log)
Notes: In my previous Cryptocurrency Technical Outlook I noted that Ethereum prices where, “testing a critical near-term support confluence at 556 where the 2018 lows converges on a slope line extending off the June highs. Note that daily RSI is also testing 30 and a break below these levels would risk accelerated losses towards the November high at 499 and more a significant support confluence at 405/24.” Ether prices are testing this final support target now with a newly identified pitchfork keeping the immediate focus lower while below today’s high.
Downside support targets are stacked here with the May trendline coming in around 382 and confluence support at 342/54 both representing key inflection points in price moving forward. Resistance stands at 499 with broader bearish invalidation at the trendline confluence around 556/70.
Bottom line: A close below 405 would keep the focus lower but with momentum so deep into oversold territory, watch out for upcoming support levels into 342 to offer some near-term relief.
Ether IG Client Positioning
- A summary of IG Client Sentimentshows traders are net-long Ethereum- the ratio stands at +8.98 (90% of traders are long) – bearishreading
- Traders have remained net-long since Jul 7th; price has moved 64.2% higher since then
- Long positions are 1.2% lower than yesterday and 5.4% lower from last week
- Short positions are 6.7% higher than yesterday and 6.0% higher from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Ether prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current Ether price trend may soon reverse higher despite the fact traders remain net-long.
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Ripple Daily Price Chart (Log)
Notes: We’ve been tracking this descending pitchfork formation in Ripple prices for over a month now. Out outlook remains unchanged from earlier this month with a break below support confluence at the median-line keeping, “the short-bias in play targeting the yearly lows at 5729 backed by 4905.” Price is within striking distance of the 4905 target with the 50-line of the downslope resting just lower.
Subtle shifts in retail sentiment suggests price could see some upside on an exhaustion rebound there but ultimately a break below would likely see accelerated losses towards the mid-December swing low at 4214 and the lower parallel, currently near 3890. Look for initial resistance at the median-line backed by 7309. Broader bearish invalidation remains steady at 8500.
Bottom line: Ripple prices have broken to fresh yearly lows and while the immediate threat is lower, upcoming support targets could offer a near-term reprieve heading into the April open.
Ripple IG Client Positioning
- A summary of IG Client Sentimentshows traders are net-long Ethereum- the ratio stands at +21.85 (95.6% of traders are long) – bearishreading
- Traders have remained net-long since Dec 25th; price has moved 78.9% lower since then
- The percentage of traders net-long is now its lowest since Feb 26th ; Ripple was trading at 9160
- Long positions are 1.0% lower than yesterday and 2.9% lower from last week
- Short positions are 28.6% higher than yesterday and 33.0% higher from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Ripple prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current Ripple price trend may soon reverse higher despite the fact traders remain net-long.
See how shifts in Ripple retail positioning are impacting trend- Learn more about sentiment!
Litecoin Daily Price Chart (Log)
Notes: Litecoin broke below the September trendline support on March 26th with the cryptocurrency down more than 20% since. Price broke below the 2018 low-day close today at 131 with the decline now eyeing initial confluence support at 113/16 where the median-line converges on the 78.6% retracement.
A break below this threshold would be needed to keep the immediate short-bias in play with such a scenario targeting the 2018 swing low at 100 backed by the September high-day close at 89. Look for initial resistance at the 200-day moving average backed by the trendline confluence at ~155. Bearish invalidation remains with parallel resistance / 50% retracement at 176.
Bottom line: Litecoin prices are coming into a near-term support confluence, putting the immediate short-bias at risk. IF prices are heading lower, a rebound off this mark should find resistance ahead of 155.
--- Written by Michael Boutros, Technical Currency Strategist with DailyFX
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