Cryptocurrencies continue to dwindle as the great speculative unwind remains in full-swing. Rallies have become quite brief before sellers quickly push prices back lower. After yesterday’s abrupt reversal we’ll take a look at charts of Bitcoin, Ethereum, and Ripple and see how much lower they might be headed. It should be noted that while one of the greatest bubbles, if not the greatest (unclear if it was bigger than the Tulip mania in the 1600s), is quickly deflating, volatility is likely to remain high for the foreseeable future and will offer nimble traders opportunities from both sides of the tape.
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Bitcoin, looking for 5920 and worse
The most recent bounce in Bitcoin lasted less than 3 days before it was swatted back lower, engulfing most of the bounce. Barring a move back above the Tuesday high at 7506, a break below 6427 will have the February spike-low in play at 5920.
Below there, we’ll look to 5555 and then the September high at 4979 as another possible spot to halt the decline, even if only for a short while. The longer-term target is in the 2-3k range, maybe worse. Prior bubbles of less magnitude have seen prices depreciate more than 90% in some instances.
From a tactical standpoint, and this goes for the whole group, rallies in the short-term look like better selling than buying opportunities. More broadly speaking at some point there may be a sustained recovery, but we’re not seeing signs of that developing just yet.
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BTC/USD Daily Chart
Ethereum, 400 target met – 275 next?
Back in late February, on the premise that Ethereum was developing an ominous looking top, the call was for it to decline to the apex of the wedge around 400 formed during the second half of 2017. Indeed, the target had been met at the tail-end of last month, with the most recent low arriving at 358.
It’s been a very steady decline since the 3rd peak of the topping formation, with bounces very minimal. There may be yet another leg lower before we finally see some relief for Ethereum. With price inside the H2 ’17 wedge, the next level of meaningful support doesn’t arrive until 275. From there, should it happen in fairly short order, we might see a recovery unfold.
ETH/USD Daily Chart
Ripple, looking for sub-40 cents
Just as a large wedge formed in Ethereum during the second half of last year, one developed in Ripple as well. The one-month super-spike rally out of the wedge has yet to be erased, and like Ethereum the target is the apex of the wedge. This doesn’t arrive until around 25 cents, but before then we’ll be looking to the May 2017 peak at just under 40 cents as the next targeted short-term objective.
XRP/USD Daily Chart
Helpful 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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