Like Wile E. Coyote running off a cliff, over the last few days BTC and the rest of the market have ventured below critical support and paused in mid-air.
Let’s take a look.
The lower dashed blue line is the bottom of the critical support band. Below that BTC is in the ‘danger zone’ we discussed last week, where support is slim and fast moves likely. After dropping into this zone with the first red candle below the blue line, bulls managed to push back for a retest of the underside of that support. The down-up pattern then continued, consolidating into a symmetrical decision-making triangle, shown in more detail on the zoomed in 4-hour chart coming next.
The decision-making triangle close-up. Volume is dropping across the pattern in typical fashion. We’ll have confirmation of the final decision the market has made out of the triangle once we see volume pop again – but with RSI (first indicator under the chart) repeatedly rejecting the dashed-blue 50 line, and with BTC under both support and under every significant moving average, odds favour a continuation downwards. This formation gives us a target of $5850, although there’s minor support just above at $6000.
A reminder that our bottoming target from the death cross (50 day crossing 200 day moving averages) remains $4800-$5000.
Ethereum has already broken out of its triangle. Volume hasn’t confirmed the breakout downwards yet, but with MACD about to cross bearish I think it’s likely to do so.
Ripple has broken out of its triangle with a high volume move. The volume is on a hammer though, showing bulls were contributing as much as bears, so on its own this isn’t confirmation of the bear breakout. We need BTC to take the lead.
Litecoin has yet to decide to move lower, but an MACD cross is looming.
Little short-term hope for bulls on these charts, although long term investors looking to build positions may be enjoying the discounts while they last!
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