Bitcoin
Bitcoin, Ethereum, Litecoin Technical Analysis: Comeback Trail
Bitcoin, Ethereum, and Litecoin are showing signs of price stability. After a strong retracement that commenced in mid-December following the strong run-up of the entire cryptocurrency market which saw Bitcoin hit its all-time high near $20,000 on December 17, 2017, the market seems to have finally found its bottom. The retracement has resulted in the entire market giving back most of the of the gains made during the run-up. Bitcoin, Ethereum, and Litecoin have been trading similarly up over the last 10-days, and the technical on all three are beginning to look promising for a reversal to the upside.
Bitcoin (BTCUSD)
On February 6th Bitcoin hit its local low of $6000.00 approaching a very critical support level of $5806.90. It has since been making higher highs on the daily chart almost every day since then, as can be seen in Chart #1 below.
Chart#1 Bitcoin Daily
Bitcoin has broken above the downtrend line that has formed since its reversal at the all-time high, as seen in purple in Chart #1. Another notable technical indicator is the fact that Bitcoin is now trading above the 9-day moving average with all 4 data points of the daily bar above the moving average. Furthermore, the 9-day moving average is now on an upward trajectory. The next downward price swing will “tell the tail.” If the next downswing stays above $6000 before price turns upward, then a reversal may very well be in progress.
Ethereum (ETHUSD):
As can be seen in Chart #2 below, the price action for Ethereum is almost an exact image of Bitcoin. Ethereum traded to a local low of $565.54, also on February 6, 2018. And just like Bitcoin, it has been trading up almost every day since. It also has broken through its downtrend line and is also trading above a positively sloped 9-day moving average.
Chart#2 Ethereum Daily
One thing that did occur with Ethereum is that it did break through its major support level $679.98. This support level is significant because it is the last price dip the Ethereum made on December 30, 2017, before its price run-up to its all-time high $1424.30 on January 13th. The daily chart shows that price broke below the support level on two occasions (February 5th and 6th), but closed at the end of the trading day above the support level, with strong volume on both days. This is characteristic of a reversal point. As is with Bitcoin, the next downward price swing will confirm if Ethereum has hit bottom and has turned upward.
Litecoin (LTCUSD):
Of the three cryptocurrencies analyzed in this article, Litecoin is showing the strongest indication of a reversal. As can be seen in Chart #3 below, in addition to displaying all the same technical characteristics as Bitcoin and Ethereum, Litecoin has made a strong upward move in the last two days which has broken through its last meaningful upward price swing on January 28, 2018. The next price dip for Litecoin may be a very good long entry point.
Chart#3 Litecoin Daily
The fact that multiple cryptocurrencies are showing indication the crypto market is turning around gives some credence to the conclusion based on technical analysis that a reversal to the upside for the entire market seems likely. But lately, “we have seen this movie before.” For those investors that don’t want to miss the next potential bullish move by the cryptocurrency market, this would be a good time to consider entering the market. However, keep the stops tight.
Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency.
Image courtesy of coinmarketcap.com