Cryptocurrency Weekly Trading Outlook – Bitcoin, Ethereum & Ripple
- Bitcoin looking to support, possibility of wedge coming into view in days to follow (Litecoin, too)
- Ethereum the strongest of the ‘majors’, still looking for trend-line test
- Ripple put in reversal-day on Thursday, but can it hold?
Whether you’re a new or experienced cryptocurrency trader, we have several resources to help you;Introduction to bitcoin trading guide, indicator for tracking trader sentiment, archived articles, and a weekly webinar discussing the latest developments.
Bitcoin & Litecoin look to hold support, build wedges
Bitcoin has been relatively quiet the past three weeks, with it closing out Friday right about where it was trading three weeks ago. The overall price action, thus far, is constructive following the massive run-up in the final months of last year.
With a little more time, a wedge – of either the symmetrical or descending variety – could come into play as long as support holds between current levels down to ~12000. If a wedge is to fully develop, then the coming days will likely lead to another week of indecisive trading, but with the downside contained.
The big key for keeping the outlook constructive will be holding the aforementioned support level or at worst the slope around 11600 dating back to May and 11160 spike-day low. A breakdown below the final thresholds of support would not only take the wedge scenario off the table, but likely lead to a much broader decline.
Litecoin is acting similar to Bitcoin, and may soon build a wedge of its own. The key for this to happen will be for the 200-level to hold at worst, or else it will be at risk of a larger decline – likely alongside Bitcoin.
Ethereum acting the strongest, trend-line test may come soon
The incredible rally from 500 to last week’s high of 1382 has Ethereum in need of a breather. A full test and hold of the trend-line running up from mid-December could position it for another thrust to new highs. Given the proximity of the trend-line, if it is to be met, will do-so in the days ahead. A break of the trend-line won’t turn the picture bearish, but will offer a sign of caution. The next eyed level of support clocks in at the December high of 863.
Ripple put in a reversal-day on Thursday, but can it hold?
This past week, Ripple was undergoing a much-needed correction before it found buyers on the MoneyGram headline on Thursday. The volatile price action put in a 'long-legged doji' (marking a potential inflection point), with the low of the candlestick viewed as important support in the near-term.
If the Thursday low fails, the next level of support comes in at a swing-high created last month at 1.2495. The general outlook for Ripple is a bit unclear given the vertical rise it had during December. An extended period of sideways price action (similar to what is currently happening in Bitcoin and Litecoin) may be needed before another round of buying can push it higher.
---Written by Paul Robinson, Market Analyst
To receive Paul’s analysis directly via email, please SIGN UP HERE
You can follow Paul on Twitter at @PaulRobinsonFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.