Welcome to market analysis from Darren Chu, CFA, founder of Tradable Patterns. Each week, Darren publishes technical analysis to help provide clues as to what might happen in the days ahead. Tradable Patterns also produces a daily newsletter on a subset of three CME/ICE/Eurex/SGX futures (commodities, equity indices, and interest rates), spot FX and cryptocurrency markets. For less experienced traders, tutorials and workshops are offered online and throughout Southeast Asia.Bitcoin weekly/daily analysis
After anticipating a volatility spike last week following historically low volatility in October and much of the first half of November, Bitcoin (BTC/USD) experienced a massive range expansion.
BTC/USD's pronounced break beneath the 20-month long uptrend support (on the weekly chart) together with BTC/USD sitting between the 61.8% and 78.6% Fib retracement of the rally into December 2017 suggest there may be notable downside in the months to follow.
However, a few technical considerations exist to offset the potential magnitude such an uptrend support line break would typically signal:
- On the weekly chart, the RSI, Stochastics and MACD have been trying to bottom for quite some time;
- On the daily chart, the RSI and Stochastics are bottomish, hinting at upside in the next few days;
- BTC/USD is also sitting at descending triangle support (on the daily chart) and has decent odds of rebounding towards and retesting this same triangle's resistance this week; and
- BTC/USD may benefit this coming week from positive sentiment around Ripple which remains relatively unscathed from BTC/USD's selloff.
Ethereum weekly/daily analysis
Like most altcoins, Ethereum (ETH/USD) suffered this past week from the crypto market volatility spike after an unusual calm. Notably, ETH/USD slid to the lower end of the two-month-plus range and sits beneath the psychologically key USD200 whole figure level.
Key will be to watch whether the current level (revisiting the September low) holds. A break below the September low could quickly yield lows last seen in July 2017 in the USD130-160 range.
As with Bitcoin on the weekly chart, RSI, Stochastics and MACD have been trying to bottom for a while. On the daily chart, the RSI and Stochastics are also look like they’re at a bottom. ETH may also benefit from positive sentiment around Ripple. In addition, ETH/USD is sitting at horizontal support (on the daily chart).
XRP daily analysis
This week, we take a look at XRP on the XRP/JPY chart. XRP has shown remarkable resilience this past week in the face of the broader crypto market selloff. XRP/JPY has formed a higher November low versus the October low (which in turn was higher than the September low).
XRP/JPY also appears to be gearing up for a test of the November high in the next week or so, supported by the bottomish or rallying daily RSI, Stochastics and MACD.
Significantly, XRP/JPY is comfortably above the psychologically key 50 whole figure level and nearing a near two-month downtrend/triangle resistance line (on the daily chart) connecting the peaks in September and November.
Given that more of the November high daily volume bars have been green than red, accumulation appears to be occurring.
This content is not financial advice and should not form the basis of any financial investment decisions nor be seen as a recommendation to buy or sell any good or product.