Technical Analysis Weekly - June 4th, 2018
This is the third in a weekly series of articles in which we will be using technical analysis trading signals to take a look at the recent price action of Bitcoin, Ether, Ripple, Bitcoin Cash, EOS and Litecoin.
After three weeks of downtrending, the crypto market has finally found its bottom, as expected in the previous week’s technical analysis. Leading cryptocurrencies performed a decent bounce, although we are now retracing comparatively fast. Once again, we had a week without any significant news. The overall sentiment remains slightly bearish, as many participants still fear the market’s movement.
Let’s take a look at the charts and see what this week has to offer.
Bitcoin - BTC
BTC/USD - Daily Chart
The leading coin of the crypto world acted as expected and bounced off of the major trendline and RSI support with a bullish engulfing candle. The MACD has already crossed and started ticking upwards. While we are slowly losing momentum, as the Stochastic RSI is almost in the overbought region and the volume is decreasing, BTC potentially has enough steam left for another wave up towards the $8,000 area. If the Stochastic RSI does not cross after this day, it is a positive sign and could help Bitcoin reach this target. Once the resistance is broken, Bitcoin will face another strong resistance at around $8,500. If we start downtrending again, the ascending trendline could provide strong support.
BTC/USD - 4h Chart
Regarding the 4 hour chart, Bitcoin broke through a bearish rising wedge pattern after it failed to break above $7,800. The Stochastic RSI shows pressure to the downside, although it is already approaching the oversold region and indicating a potential crossover. On the MACD, we can see that a bearish crossover has already happened as the histogram ticks down. The 43.6 RSI Level is currently acting as support. If it fails to hold above this level, we can expect a drop to the $7,300 region. The 30 RSI level is another support which is in range.
Ether - ETH
ETH/USD - Daily Chart
The price of Ether built a higher low on the daily chart when it bounced back from the $500 region, but was recently rejected at $630. The Stochastic RSI indicates that there still might be enough momentum for another wave that could possibly lead to the descending trendline. If the price breaks $630, the range between $670 and $730 could be potential targets. On the bearish side, we expect the ascending trendline to act as a significant support.
ETH/BTC - Daily Chart
Ether’s downtrend against Bitcoin reversed on the 29th of May. While it currently faces a resistance at 79820 satoshi, the Stochastic RSI signals bullish momentum. If this resistance is broken, the previous swing high at around 0.08639 BTC will act as another great obstacle, and we can assume an increase up to the descending trendline.
Ripple - XRP
XRP/USD - Daily Chart
Today, XRP was rejected by the major descending trendline. This rejection is supported by the fact that the Stochastic RSI is right at the top of the overbought region. Regarding the fact that the bullish momentum is heavily decreasing, a trend down to the ascending trendline seems quite realistic.
Bitcoin Cash - BCH
BCH/USD - Daily Chart
Bitcoin Cash rebounded off of the heavy support at $882. The current pattern could be interpreted as a forming inverse head & shoulders pattern, which is a very bullish candlestick pattern. However, in order to complete and break out of the pattern, it first has to break a few, more or less, strong resistances. After breaking the current resistance of $1,160, BCH has to face more resistance at $1,300, $1,560, and eventually $1,850. If the bears get back into control, the $880 area could act as a major support once again.
EOS/USD - Daily Chart
EOS is in the process of launching the first version of their mainnet right now. While the price was rejected at the $15 area, and the Stochastic RSI is entering the overbought zone, there are still some positive signs. The MACD performed a bullish crossover, and the histogram has begun to tick upwards. Similar to other TOP 5 coins, EOS has an ascending trendline supporting its uptrend. If $15.87 is broken, we can expect a rise to between $17.50 to $22.
Litecoin - LTC
LTC/USD - Daily Chart
As expected, Litecoin reversed at the bottom of the descending triangle. After a quick increase of roughly 10 percent, it is currently losing bullish momentum. Still, the MACD performed a crossover and started to tick upwards. The next resistance would be $133.50, and after a break of it, we can expect the price to head towards the trendline resistance. Traders should stay cautious as long as LTC is inside the descending triangle.
The increase in prices did not come as a great surprise for many experienced traders. Yet, the rally might not be as strong as some had hoped for. Despite the fact that today can be seen as an overall red day, we still are currently in a neutral zone. On shorter time frames, indicators are in the oversold zones and provide signs for a reversal.
While there is definitely potential for another bullish week, traders are advised to stay rational and critical. We should always keep in mind that the overall trend is bearish, and that trading against the trend always comes with some risks.