Technical Analysis February 28, 2018: Bitcoin, Ethereum, Litecoin

It seems as though the cryptocurrency market has somewhat stabilized. Many of the cryptocurrencies have hit the bottom of their slide, and are now bouncing back. The daily extreme price fluctuations have tapered down, and the frenzied media that constantly beat the “catastrophe” drum has somewhat attenuated. In spite of the wild and crazy ride over the last few months, the cryptocurrency market is still here and is stronger than ever.

Bitcoin (BTCUSD)

Bitcoin has bounced off the recent low of $6,000.00 it hit on February 06, 2018 which ended its slide. It has since made a strong upward price swing to a local high of $11,788 signaling a potential reversal from the massive downtrend it has been on since mid-December.

Chart#1 Bitcoin Daily

Bitcoin is in the midst of completing an inverted head-and-shoulders price pattern, as can be clearly seen in the daily chart above (Chart #1). Bitcoin just completed a price dip that formed the right shoulder of the pattern four days ago on February 25^th. Since then Bitcoin has bounced and is now trading approximately mid-range between the right shoulder price point of $9,359.90, labeled as the key support level, and an $11,788 resistance level at the high point of the prior upward price swing coming from the head of the pattern (labeled key resistance level). Breaking the resistance would complete the inverted head-and-shoulders price pattern, and confirms a reversal. If however, price dips below the right shoulder price point, or worse to the head of the pattern, the potential for a further slide of Bitcoin becomes highly probable.

 Ethereum (ETHUSD):

Ethereum also found its bottom of $565.54 on February 6, 2018, after its massive slide. The bottom was also followed by a strong upward move to a local high of $979.00.

Chart#2 Ethereum Daily

Ethereum is about to complete an asymmetric triangle price pattern, as can be seen in chart #2 above. This type of pattern is indicative of an upcoming breakout. However, as a general rule, it does not indicate the direction of the breakout. 

Litecoin (LTCUSD):

Litecoin is exhibiting price action that is very similar Bitcoin. February 6, 2018, was also the day Litecoin completed its slide to a low of $106.52. And almost in perfect tandem with Bitcoin, it made a strong upward move to a high of $252.86, also on February 20^th, then dipping to form the right shoulder of an inverted head-and-shoulders price pattern. Litecoin is also trading within the neckline and the key resistance level of the pattern, as noted in Chart #3 Below.

Chart#3 Litecoin Daily

The mere fact that two of the top three cryptocurrencies are exhibiting very strong indication or a reversal to the upside is a very good sign for the cryptocurrency market as a whole. For those traders and investors who missed the wild price swings of the last few months, or worse, those that got on the wrong side, this is not the time to be discouraged. The is the point whereby six months or a year from now people will be saying “I should have pulled the trigger.” While there is still risk in the cryptocurrency market, the upside potential is better now than it was when all the cryptocurrencies were making new all-time highs on an almost daily basis.

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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.