After a period of enormous growth that brought the market capitalization of cryptocurrencies from $281 billion dollars around the end of November 2017 to the peak of 813 billion during the first week of January 2018, we have seen a significant correction that normalized the market, re-establishing the basis for another potential cycle of growth.
During the past two weeks, BTC price action remained in a state of uncertainty. Overall, the bearish sentiment slightly prevailed on the bullish one, mainly due to the recent FUD wave that scared the late investors. However, the future implementation of the Lighting network and the resilience shown could soon change the sentiment.
On a technical standpoint, BTC on the daily chart seems to be in a falling wedge pattern that roughly started at the beginning of January. A breakout would likely lead the price action to a higher high, testing the dynamic resistance level printed by the Ichimoku cloud.
While the falling wedge is a pattern that has a higher probability to conclude in a breakout rather than a breakdown, new FUD could reinforce the bearish sentiment. In that case, we could see the price action test the previous historical supports levels around $8,300 USD.
The 200 exponential moving average (EMA) printed on the daily chart as a bold blue line is a critical level that acted as a support during the whole BTC bull market since October 2015. It served as resistance as well during the bear market that started in August 2014. At present, on a technical analysis perspective, a closing of the daily candle under the 200 EMA would constitute a sound bearish signal which could determine the start of a new bear market cycle. Therefore, keep an eye on it!
The Status of Altcoins
During the last seven days, the altcoin market took a hit in general, because of the drop in market capitalization. With every drop in price, opportunities tend to arise. In the next points of this article, we will check several setups.
ETH shows still signals of strength paired with USD. After the completion of a double bottom Adam-Eve pattern, the price action appears to be in an upward channel that could re-test the recent highs of $1,300 USD soon. However, considering the current instability of the market, it’s necessary to put a close eye to the dynamic support levels printed by the Ichimoku cloud and the 200 EMA.
XRP continues the downtrend that commenced at the beginning of the month, after the epic bull run that we observed at the end of December 2017. On the four hour chart, the price action tested the dynamic resistance of the Ichimoku Cloud during 28 January 2018 and created a higher low today, 31 January. The price is ranging in a symmetrical triangle has to decide if break the downtrend or continue it. A breakdown of the triangle could lead the price action to retest the historical support of $0.7 USD. A breakout, on the other hand, could uplift the price toward a retest of the $1.7 USD resistance.
NEO paired with USD price action reminds the one of ETH. It’s feasible to see the price bouncing in an upward channel that could bring to the previous highs of $200 USD. However, caution is adviced, and the recent support level of $135 USD must be held.
Lately, there has been a lot of hype related to Ethereum Classic, thanks to the announce of the Callisto airdrop that will take place in March. On a Technical analysis perspective, ETC attempted to break the dynamic resistance printed by the Ichimoku cloud, but the breakout failed because of the general market suffering that took place yesterday, 30/01/2018.
At the moment on the four-hour chart, the price is ranging between $27 and $32 USD. I can see another cloud-test happen soon. A Kumo breakout could lead the action to the previous highs of $42 USD. On the other hand, if the $27 dollar support doesn’t hold, it’s feasible to see the price retrace to the previous levels of $23 USD.
Bitcoin Cash is in a dormant mode, sitting on its support at 14000000 satoshis. While on the USD pairing the price action is very similar to the one that we previously analysed with XRP, the BTC pairs look more bullish, forming a giant Adam-Eve pattern. The completion of the pattern would imply a breakout of the dynamic resistance printed by the Ichimoku cloud, which would have a substantial impact on the size of an eventual leg-up.
This coin, along with ETC, will be featured on the new exchange Robinhood, which is a good reason to follow it carefully due to the possible entrance of new liquidity.
Keep an eye on CryptoCoinMastery.com for future updates related to the price action of your favorite coins, useful insight and upcoming mid-caps setups!