- Fast averages cross downwards and complicate the situation in the short term.
- Key levels may be lost and fear may return to the market.
- Upwards bounces are possible, mainly in Ethereum.
The trading week begins with significant declines that have started mid-morning in the Asian session. The three main players on the crypto-board, Bitcoin, Ethereum and XRP move downward in search of support for the 200-period exponential moving average.
There is much confusion in the sector, and there is a proliferation of Twitter polls on the next direction of the market. The vast majority point to falls in the short term.
In the technical analysis, the timeframe of the analyzed graph marks the timeliness of the study, in the case of the analysis in a range of 4 hours begins to fade in two or three days. So I'm going to focus on this time frame and let the market tell us what the next prices to visit are.
BTC/USD 240 Minute Chart
BTC/USD is currently trading at the $3.714 price level after losing $3.800 mid-morning in the Asian session. The drop sent the price directly to the first support for price congestion at $3,690, causing the EMA50 to cross down over the SMA100.
This crossing causes a change in the scenario that puts it squarely in a bearish sideways environment and probably with increased volatility.
Below the current price, the first support level is at $3,690 (price congestion support). The second support level is at $3,650 (SMA200), a critical level that must be respected to avoid a return to the long-term bearish scenario. The third level of support for the BTC/USD pair is at $3,600 (price congestion support).
Above the current price, the first resistance level for the BTC/USD pair is at $3,800 (price congestion resistance, SMA100, and EMA50). This accumulation of technical resistances makes this price level a critical breaking point. The second resistance level is $3,900 (price congestion resistance), and exceeding it would pose a bullish environment in the short term. The third resistance level is at $4,050 (price congestion resistance).
The MACD on the 4-hour chart shows the averages heading lower after a failed bullish cross attempt. This pattern usually takes prices lower in the following days and ends in a sudden, but short-lived rise.
The DMI on the 4-hour chart shows very clearly what lies ahead. The bears are in command of the market, moving freely above the ADX line. As long as this is the case, prices will move at the pace marked by the selling side. The bulls continue to retreat and are not keen on ceding leadership to the bears. The ADX line profile proposes a bearish acceleration in the next two days.
ETH/USD 240 Minute Chart
The ETH/USD pair is currently trading at $127, practically at the SMA200 level. The chart is similar to the BTC/USD pair but more developed and with a stronger bearish profile. However, this is not why we should be more pessimistic with Ethereum than Bitcoin, because as we will see later, the end of the falls in the ETH/USD may be coming to an end.
Below the current price, the first level of support is at $126.24 (SMA200). The second level of support for the ETH/USD pair is at $120 (price congestion support), while the third level is $115 (price congestion support).
At this time the price aims at the SMA200 and support levels are still in place.
Above the current price, the first resistance level for the ETH/USD pair is at $131 (price congestion resistance). The second resistance level is in the broad range of $136.2 (EMA50), then $139 (SMA100) and finally $142 (price congestion resistance). The third resistance level is at $151 (price congestion resistance).
The MACD on the 4-hour chart shows how the averages are once again pointing downwards with potential ahead. A detail to highlight is the low bearish inclination of the indicator despite the relative strength of the falls in the price.
The DMI on the 4-hour chart shows a different profile than that seen on the BTC/USD pair. Here the bears are not able to get above the ADX line, so suggesting the typical pattern, the most likely is a bearish rejection to sellers that would cause a bullish turn in the price. The bulls, for now, are still retreating and almost reach extreme lows where there have been previous turns in the price.
XRP/USD 240 Minute Chart
XRP/USD is currently trading at the $0.306 price level. It is very close to the bullish trend line that starts at the January lows.
This trend line is the first level of support for the XRP and is at the $0.302 price level. The second support level is at $0.300 (price congestion support), where the bullish trendline would be lost, and XRP would enter into a bearish environment. The third support level is $0.293 (price congestion support).
Above the current price, the first resistance level for the XRP/USD pair is between $0.308 (price congestion resistance) and $0.311 (SMA200). The second resistance level is at $0.317 (price congestion resistance), heavily reinforced by the EMA50 at $0.316 and the SMA100 at $0.318. This level is heavily fortified. The third resistance level is at $0.328 (price congestion resistance).
The MACD on the 4-hour chart is also accelerating lower although it does not show the bearish movement seen in price.
The DMI on the 4-hour chart shows bulls losing strength and falling below the ADX line, a negative for the XRP. The bulls dominate the moment and enjoy many advantages over the buyer side. The structure is decidely bearish.
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