Bitcoin Analysis: Failure of bullish continuation pattern, Ethereum eyes trend line support

Omkar Godbole FXStreet Contributor

Bitcoin or BTC/USD traded flat lined around $2760 yesterday before a failure of the bullish continuation pattern opened doors for a drop to the current price of $2650. As per coinmarketcap.com, Bitcoin has lost 2% over the 24 hour period. The total market cap of the virtual currencies dropped to $91.48 billion from the previous day’s figure of $94.54 billion. The Bitcoin dominance rate has improved slightly to 48.0% from 47.5%.

Technicals

Resistance

$2730 (2/1 Gann fan line)
$2869 (resistance on 4-hour)
$3000 (record high)

Support

$2608.27 (supp on 4-hour chart)
$2551 (upward sloping 4-hour 50-MA)
$2499 (38.2% Fib R of $1758.20-$2957)

4-hour chart - failure of bullish continuation pattern

The chart above shows a ‘sideways breach’ of the symmetrical triangle (bullish continuation pattern). As per textbook rules, the sideways breach represents pattern failure. The subsequent drop adds credence to the breach of the rising trend line and open doors for a sell-off to the 1-hour 50-MA level of $2550. The 4-hour RSI has turned bearish as well.

Daily chart - dip demand likely around 10-DMA

The 10-DMA is still sloping upwards, while the RSI is nicely positioned for a rebound from the neutral territory. Dips to the 10-DMA level of $2526 could find fresh buyers. On the higher side, a move back above the 2x1 Gann fan line would open doors for $3000 levels.

Ether eyes trend line support

Daily chart

Ether witnessed an upside break from the falling channel on July 20. But the virtual currency failed to gather pace in the subsequent days… Prices are currently trading at 4-day low of $212.20.
The RSI has turned over in favor of the bears and the MACD shows the bearish move is about to gather pace.
Thus, prices are likely to re-test the sliding trend line support currently seen around $175 levels.

Bullish scenario: Only a daily close above the 2/1 Gann fan line would add credence to the bullish break of the falling channel and could yield $323.69 (June 28 high) levels.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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