Cryptocurrency Charts: Bitcoin, Ethereum & Co. Sinking Towards a Floor?
- Bitcoin closing in on the next support level at 5555
- Ethereum has support just under 500 coming up
- Litecoin trading around the 200-day, June 2017 spike-high
See how traders are positioned in Cryptocurrencies and what it might mean on the IG Client Sentiment page.
Selling in the cryptocurrency market has been extremely heavy, an expectation we thought could be the next step when the character in price action began changing last month – that is, initial declines off the highs were not piquing the interest of buyers as they once did on prior declines over the past 1-3 years. With that said, though, rallies may soon commence with new support levels arriving amid oversold conditions. (A sentiment my colleague Nick Cawley also expresses.)
Bitcoin closing in on the next support level at 5555
Since breaking a wedge back on Jan 30, the precipitous decline in Bitcoin has broken support levels we had penciled in at 9222 and 7888. This brings us to the next level on our radar at 5555. Given how sharp the decline has been in recent sessions, and off the high near 20k, a big bounce may soon be in store. That bounce may commence from around the 5555-level.
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Chart 1 – BTC/USD: Daily
Ethereum has support just under 500 coming up
Ethereum was the hold-out of the group, initially, before finally succumbing to heavy selling the past few sessions. The 770 spike-day low from last month held with precision on 2/2 and 2/4 before breaking yesterday.
The December spike-day low at 493 is now in the cross-hairs, which at this time is in confluence with the 200-day MA (would be the first test in a year). If price continues to free-fall into this area, ETH/USD will not only have good support at hand, but be extremely oversold short-term.
Below there, around 400 we have the top of the ascending wedge from last year which led to the final leg higher, also a big area of interest if selling takes shape below 500. The key is to watch bullish price action before looking for a bounce to develop.
Chart 2 – ETH/USD: Daily
Litecoin trading around the 200-day, June 2017 spike-high
Litecoin is currently at an interesting spot with the spike-high from June at hand along with the 200-day MA. We could see a low form here, but if the group continues its decline in earnest, then support is unlikely to hold. The prior two cryptos we looked at have cleaner levels to watch if that is the case. Watch how price action unfolds around 88-93 with further weakness.
Chart 3 – LTC/USD: Daily
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, and a weekly webinar discussing the latest developments.
---Written by Paul Robinson, Market Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.