Bitcoin falls further but relief may be in sight

In Insights

 

Bitcoin (BTC/USD) fell for another week but is slowing in its slide as it tests the September 2017 low and the June 2017 high.

BTCUSD_daily_technical_analysis-1

BTC/USD is still under pressure this coming week with its downsloping weekly MACD.

But with the weekly Stochastics nearing once again the lower limit of zero, and Stochastics leading the MACD in its sensitivity to shifts in momentum, BTC/USD could soon see some positive action.

Bulls should not get overly excited yet. They will want to wait for a break above the downtrend resistance line connecting the December 2017 and November 2018 highs. This would signal a more sustainable, longer-term basing pattern.

BTCUSD_weekly_technical_analysis-1

 

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Ethereum at descending wedge support

ETHUSD_daily_technical_analysis

Ethereum (ETH/USD) slid slightly further this past week to what is arguably descending wedge support (on the weekly chart).

Given the bottomish daily RSI, Stochastics and MACD, along with the bottomish weekly equivalents (especially with weekly Stochastics nearing the lower limit of zero), risk:reward is becoming increasingly favorable for bulls.

Before longer-term bulls look to establish fresh longs, they'll want to see the weekly RSI, Stochastics and MACD decisively turn up. Bears meanwhile looking to initiate shorts will need to be cautious.

A successful break this week above descending wedge resistance (on the weekly and daily chart) would likely be quickly followed by a test of the USD100 whole figure level.

ETHUSD_daily_technical_analysis

XRP finds support

XRPJPY_daily_technical_analysis-1

XRP (XRP/JPY) ceded more ground this past week but appears to be finding support at a line connecting the August, September and December lows.

A bounce off this support this week will likely coincide with a test of the psychologically key 50 whole figure level, and continue a pattern of higher lows (in December versus the August and September lows). 

With the bottomish daily RSI, Stochastics and MACD, XRP/JPY may not retest the 2018 low, especially if the tentatively bottomish signals of Ethereum (ETH/USD) on its weekly and daily chart boost sentiment. 

Before longer-term bulls become excited, they'll want to note that the oversold readings on the daily RSI and Stochastics can persist for a month or so, and should be accompanied by the same bottomish patterns on XRP/JPY's weekly chart to improve the chances of a sustainable bounce.

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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. Trading cryptocurrency is complex and comes with a high risk of losing money, particularly if you trade on leverage. You should carefully consider whether trading cryptocurrencies is right for you and take the time to learn how trading works and decide how much money you are prepared to lose.

WRITTEN BY

Darren Chu, CFA

Darren Chu, CFA, is the founder of Tradable Patterns, publisher of daily technical analysis on Bloomberg, Thomson Reuters, Factset, Interactive Brokers, Inside Futures, and other partner websites. Before the launch of Tradable Patterns, Darren served as IntercontinentalExchange | NYSE Liffe's country manager for Australia, India, and the UAE, expanding his role to look after Liffe business development in APAC ex-Japan/Korea until his departure mid April 2014. Previously, Darren was with the TMX Group | Montreal Exchange, marketing Canadian futures and options across North America, London, Singapore and Hong Kong. Darren also launched and managed CMC Markets Canada's Chinese marketing and sales team, along with educational offering. Visit www.tradablepatterns.com for more information.