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Ethereum Chart Set to Roll Over, Ripple on the Verge of a Breakdown

Ethereum Chart Set to Roll Over, Ripple on the Verge of a Breakdown

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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.

To see how traders are positioned in Cryptocurrencies and other markets, check out the IG Client Sentiment page.

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.

Want to learn more about cryptocurrencies? Check out this guide, Introduction to Bitcoin Trading

ETH/USD Daily Chart (Topping Sequence)

ETHUSD daily price chart with topping sequence

ETH/USD 4-hr Chart (Head-and-shoulders)

ETH/USD 4-hr chart with head-and-shoulders pattern

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)

XRP/USD daily price chart, not finding much buying interest at support

Resources for Cryptocurrency Traders

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.