Bears are managing to prevent a very important resistance level in the daily chart of Bitcoin from being broken.
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.
If bulls push the price past $10,565, it may break the upside border of a Triangle pattern, which can be clearly seen in the weekly chart of the asset. If it happens, the market may start a strong bullish rally. However, as long as the instrument is trading below the above-mentioned level, it’s too early to expect any significant growth of BTCUSD and the entire cryptocurrency market. Moreover, if Bitcoin falls lower than $9,350, it may continue trading downwards to reach $8,670 or even deeper.
Bitcoin
It was literary yesterday when bears managed to push the asset away from an important resistance level. The RSI indicator also rebounded from the resistance line. The key trading idea implies that the pair may rebound from the descending channel’s upside border and fall towards $6,500, where it may complete an Inverted Head & Shoulders reversal pattern. To confirm this decline, the price must break the support level and fix below $8,415. However, this scenario may no longer be valid if the instrument breaks the channel’s border and fixes above $10,565. In this case, the reversal pattern will be canceled and Bitcoin may continue growing with the predicted target at $13,865.
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As we can see in the H4 chart, Bitcoin has already rebounded from $10,000 three times. The unwillingness of the market to continue growing puts a lot of pressure from bears and implies a potential decline with the first target at $8,670. One shouldn’t exclude the possibility of a test of $9,650 and further decline of the cryptocurrency. A signal in favor of this idea is a rebound from the resistance line at the RSI. Another strong signal will be a breakout of the rising channel’s downside border. Still, this scenario may be canceled if the asset breaks $10,565 and leaves the channel to the upside. In this case, the instrument may continue forming the ascending tendency.
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Ethereum
In the daily chart, Ethereum is looking really strong in favor of further growth. Bulls managed to cancel the formation of a Double Top reversal pattern and make the asset reach the descending channel’s upside border, where they faced another resistance level. There are risks of seeing an attempt to rebound with the first target at $216. If the pair breaks the rising channel’s downside border, it may continue trading downwards to reach $175. A strong signal in favor of this idea is a rebound from the descending trendline at the RSI. However, this scenario may no longer be valid if the price breaks $250. In this case, the instrument may break the descending channel and continue trading upwards to reach $287 or even $300.
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On shorter timeframes, Ethereum is demonstrating an aggressive growth; right now, it is rebounding from the lower band of the Bollinger Bands indicator. However, despite bullish pressure, there are risks of the formation of a Head & Shoulders reversal pattern, which may force a new decline towards $195. A short-term trading idea implies that the pair may test $248, where it is expected to complete the pattern’s Right Shoulder and then resume falling. To confirm this idea, the price must break the support level and fix below $229. Another signal in favor of this idea will be a rebound from the resistance line at the RSI. However, this scenario may be canceled if the asset breaks the local high and fixes above $250. In this case, the instrument may cancel the reversal pattern and continue trading upwards to reach $270 or even higher.
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Litecoin
As we can see in the daily chart, Litecoin hasn’t been able to break the resistance level and fix above $51. If it had happened, bulls would have canceled a Head & Shoulders reversal pattern. At the moment, the pattern is still in effect and there are risks of further decline to complete it. The downside target is at $25. A signal in favor of a possible decline is a rebound from the resistance line at the RSI. However, this scenario may no longer be valid if the pair breaks the local high and fixes above $51. In this case, the instrument may continue growing towards the descending channel’s upside border at $65.
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In the H4 chart of LTCUSD, there is also a potential for the formation of a small Head & Shoulders reversal pattern. While forming the pattern, the pair may grow towards $48, where it may finish the Right Shoulder. After testing it, the price may start a new decline. To confirm this decline, the asset must break $45, thus leaving the rising channel and falling to reach $38. Another signal in favor of this idea will be a rebound from the trendline at the RSI. However, this scenario may be canceled if the cryptocurrency breaks $50. In this case, the reversal pattern will be canceled and the instrument may continue trading upwards.
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Bitcoin Cash
In the daily chart, Bitcoin Cash is still stuck inside a Triangle pattern, thus indicating some uncertainty among market players until the price breaks the pattern’s borders. The RSI is testing the resistance line already for the third time, so there are chances to see a rebound and a new decline with the predicted target at $136. To confirm this idea, the asset must break the pattern’s downside border and fix below $215. However, this scenario may no longer be valid if the instrument breaks the upside border and fixes above $280. In this case, the pair may continue trading upwards to reach $355.
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As we can see in the H4 chart, the cryptocurrency is growing inside the rising channel. One should expect a test of $258 and a new decline with the target at $215. A signal in favor of this idea will be a rebound from the resistance line at the RSI, as well as the formation of а Head & Shoulders reversal pattern. To confirm the decline, the price must break $240 and leave the rising channel. However, this scenario may be canceled if the asset breaks $270. In this case, the reversal pattern will be canceled and the instrument may continue growing towards $280 or even higher.
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EOS
As we can see in the daily chart, EOS is stuck between the resistance and support level at $3.14 and $2.23 respectively. There is a potential of a breakout of the rising channel’s downside border and further decline towards $1.28. To confirm this idea, the cryptocurrency must break the support level and fix below $2.23. Another strong signal in favor of this idea is a rebound from the resistance line at the RSI. However, this scenario may no longer be valid if the instrument breaks the sideways channel’s upside border and fixes above $3.14. in this case, the asset may grow with the target at $4.25.
Photo: Roboforex / TradingView
In the H4 chart, the cryptocurrency is rebounding from the support level. One should exclude an attempt to grow and test the resistance level at $2.86 before starting a new decline. A signal in favor of the rebound from the resistance level will be a test of the trendline at the RSI. To confirm the decline, the price must break the rising channel’s downside border and fix below $2.59. However, in the case of further growth and a breakout of $2.86, the instrument may continue trading upwards with the target at $3.14.
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.