There was no shortage of price action this past week, so let's take a look at the charts for BTC, ETH and XRP.
Bitcoin turns bearish
Over the past week, Bitcoin saw a bullish run up to USD4,240 before retracing down to the USD3,600 area.
The BTC/USD 2-hour chart below shows BTC bullishly breaking through the 200 EMA with strong momentum. The 200 EMA break can also be observed on the 4-hour chart, but BTC failed to touch this key moving average on the daily chart.
Since completing it’s final wave up in the current market structure, BTC has once again fallen below the 200 EMA, which now acts as resistance.
Zooming out to the 4-hour chart, we can see that BTC has retraced to the 0.618 Fibonacci level, which is a large retracement.
This suggests that the overall market in general is leaning bearish towards BTC. At this point, we’ll have to see if the 0.618 level holds.
If this level does hold, we may see see consolidation between the 0.618 and 0.5 levels before the formation of another upward structure. If this level does not hold, we could see a retest or the USD3,000-3,200 area.
BTC’s daily chart is more bearish than bullish. The difference is miniscule, but you can see that Bitcoin failed to make a higher high during this week’s uptrend.
Coupled with the fact that BTC failed to find support above the 200 EMA, this price action on the daily chart suggests that the bears are still in control for the time being.
While the Ethereum (ETH) chart looks similar to Bitcoin’s, the gains percentage-wise were much higher.
After a sustained downtrend during the first two weeks of the month, ETH has since rallied nearly 100% with a 60% move just this past week.
Since hitting a high of USD160 on December 25, ETH has also retraced to the 0.618 Fibonacci level and currently appears to be consolidating before the next move.
Like BTC, ETH also broke its 200 EMA. As you can, the past two candlesticks on the 4-hour chart (8 hours total) have been fairly indecisive.
Now may be a good time to observe for any indicators of a new trend before entering any trades.
After a 30% run up to USD0.45, XRP has retraced and broken the 0.618 level.
While it didn’t fall all the way down to the 0.768 level, XRP seems to be currently trying to test the 0.618 level.
If it doesn’t break through, XRP could be in for another leg down. There have also been instances in the past where XRP has acted as a leading indicator for BTC and the rest of the market as a whole.
We may see BTC and ETH make another leg down to the 0.768 area - especially when considering BTC, ETH and XRP are not yet oversold on the 4-hour time frame.
In general, this past week was a very bullish one, especially when considering the bearish market sentiment over the past few months. Other cryptocurrencies also recorded enormous gains (BCH +80%, DASH +45%, XLM +30%).
When a move like this seemingly comes out of nowhere and is obviously not based on any fundamental shift in the cryptocurrency industry, it should give pause for thought.
This particular upward trend just happened to end on Christmas Eve or Christmas Day (depending on where you live). With this in mind, this week’s move may be somewhat artificial in nature and not indicative of a bullish reversal.
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.
Trader, analyst, Liquid contributor. Editor of Decrypto.net.