Ethereum Chart Set to Roll Over, Ripple on the Verge of a Breakdown
The cryptocurrency space looks headed lower soon, with a couple of charts holding set-ups of intrigue given the posturing and price levels in play. Ethereum (ETH/USD) is sporting a pattern inside a pattern, while Ripple (XRP/USD) is showing little buying interest at key price support.
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Ethereum ‘head-and-shoulders’ developing on right side of topping pattern
Recently, we’ve been discussing the ‘three peaks’ topping formation in Ethereum, and that it points to a resurgence of selling to commence at some point relatively soon. Adding to the notion that a decline may be very near is the development of a ‘head-and-shoulders’ pattern as part of the 3rd peak, or second lower high.
A break of the neckline and support zone (800/770) should kick off the next leg lower and further cement the broader topping pattern. Looking lower, there is trend-line support from November, then below there the 200-day MA, and Feb low at 565. The major target objective, though, lies near 400, where the apex of the wedge from late last year lies.
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ETH/USD Daily Chart (Topping Sequence)
ETH/USD 4-hr Chart (Head-and-shoulders)
Ripple sparking little buying interest at significant support
Buyers continue to show a lack of enthusiasm when it comes to Ripple, despite it sitting on a major area of support. This lack of sponsorship suggests it won’t hold for much longer, and it looks likely sellers will soon gain the upper hand.
A breakdown below 85-cents is seen as pushing XRP/USD down to the 200-day MA around 64-cents, then the January 2017 trend-line which is in near confluence with the moving average at this time. Below there, the Feb spike-low will be at risk of breaking. Like Ethereum, the bigger downside objective is the apex of a wedge from the second-half of last year, around 25-cents.
XRP/USD Daily Chart (Support weakening)
Resources for Cryptocurrency Traders
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---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.