The cryptocurrency market is correcting again. Assets are rebounding from their respective resistance levels while the potential for significant decline remains. On shorter timeframes, instruments are reversal patterns and some of them have already left rising channels.
Dmitriy Gurkovskiy, a senior analyst at foreign exchange broker RoboForex, provides his vision of the possible tendencies in price changes for Bitcoin as well as for other major cryptos.
The cryptocurrency market is correcting again. Assets are rebounding from their respective resistance levels while the potential for significant decline remains. On shorter timeframes, instruments are reversal patterns and some of them have already left rising channels. All these factors taken together may indicate one more descending wave towards the lows. For example, in the short-term BTCUSD may test $4,000, but we shouldn’t expect a continuation of this movement. Most likely, the price will form another bullish pattern to indicate an anticipated growth to break $10,000. However, right now bulls will have to retreat.
Bitcoin
In the daily chart, the asset has rebounded from Moving Averages. As we can see, bulls have failed to fix the price above $8,000, break Moving Averages, and continue growing towards the descending channel’s upside border. The key trading idea implies a new decline from the current levels towards $4,030. A strong signal to confirm this idea may be a rebound from the resistance line at the RSI. As soon as the indicator breaks the line, the instrument may try to test $10,700, but the bearish pressure remains pretty strong so far. However, the bearish scenario may no longer be valid if the pair breaks the descending channel’s upside border and fixes above $9,400.
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As we can see in the H4 chart, Bitcoin has failed to break Moving Averages, that’s why the current descending impulse continues. Moreover, the pair has managed to fix below the downside border of a Wedge reversal pattern, that’s why there are chances to see a further decline with the first target at $5,550. Another signal to confirm this scenario is a rebound from the resistance line at RSI: in the past, the price already rebounded from the line while testing it. Still, the bearish scenario may be canceled if the asset breaks the resistance line and fixes above $8,245.
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Ethereum
As we can see in the daily chart, Ethereum is rebounding from the upside border of Bollinger Bands; to confirm the growth, the asset must break this border and fix above it. The key trading idea implies a further decline with the predicted target at $85. A strong signal in favor of this scenario may be a rebound from the resistance line at the RSI. There might be a potential for a reversal and a new growth at the moment when the pair tests the local lows. However, the bearish scenario may no longer be valid if the instrument breaks the resistance level and fixes above $205. In this case, the pair may continue growing and test the descending channel’s upside border.
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On shorter timeframes, the price is correcting within the channel. The pair is expected to break the rising channel’s downside border and fall towards $113. To confirm this scenario, the instrument must fix below $150. A strong signal in favor of this idea will be a test of the broken trendline at the RSI. However, this scenario may be canceled if Ethereum skyrockets towards the resistance area and fixes above $177. In this case, the asset may continue growing with the target at $205.
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Litecoin
In the daily chart, LTCUSD is rebounding from a quick Moving Average. Here, there are also risks of further decline with the predicted target in the area between $19 and $12. A strong signal in favor of this idea will be a rebound from the resistance line at the RSI. However, the bearish scenario may longer be valid if the asset skyrockets and fixes above $65. In this case, the instrument may break the descending channel’s upside border and continue growing with the target at $82.
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As we can see in the H4 chart, the price is falling but still moving inside the rising channel; it has rebounded from Moving Averages, thus indicating a bearish impulse. There are chances of seeing a breakout of the channel’s downside border and further decline towards $27. A signal in favor of this scenario will be a breakout of the trendline at the RSI. Still. The bearish scenario may be canceled if the asset grows and breaks $47. In this case, the instrument may continue trading upwards with the first target at $55.
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EOS
As we can see in the daily chart, bulls are testing the downside border of the Ichimoku Kinko Hyo Cloud; there is a potential for a rebound and further decline with the predicted target at $1.22. A strong signal in favor of this idea is a formation of a “5-0” descending pattern, but for completing the pattern the pair must test the channel’s upside border. Another signal to confirm this scenario may be a rebound from the resistance line at the RSI. However, the bearish scenario may no longer be valid if the asset skyrockets and fixes above $3.05. In this case, the instrument may continue growing.
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On shorter timeframes, the asset is no longer moving inside the rising channel. Possibly, the pair may test the channel’s broken border and resume falling with the first target at $2.03. Another signal to confirm this idea will be a breakout of the support line at the RSI. However, if the instrument fixes above the upside border of the Ichimoku Kinko Hyo Cloud and breaks $2.65, the price is expected to resume growing and form a new bullish impulse.
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Bitcoin Cash
In the daily chart, there is still a potential for the formation of a “Wolfe Wave” bullish pattern, which indicates a high probability of a decline towards the area between $136 and $80. Only after reaching this area, bulls may start a proper rising movement. A strong signal in favor of this idea will be a rebound from the trendline at the RSI. To confirm this scenario, the instrument must break the downside border of Bollinger Bands and fix below $210. However, this scenario may no longer be valid if the pair breaks the resistance line and fixes above $275. In this case, the upside target may be at $363.
Photo: Roboforex / TradingView
As we can see in the H4 chart, the cryptocurrency has broken the rising channel’s downside border. There are chances of seeing further decline towards $200 or even the area between $168 and $136. Another signal in favor of this idea will be a test of the rising channel’s downside border and a rebound from the resistance line at the RSI. However, the bearish scenario may be canceled if the price fixes above $275. In this case, the pair may break the channel’s upside border and continue growing to reach $363.
Photo: Roboforex / TradingView
Disclaimer: Any predictions contained herein are based on the authors' particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.
Dmitriy Gurkovskiy is a senior analyst at RoboForex, an award-winning European online foreign exchange forex broker.