Virtual currencies bitcoin and litecoin was in a bullish correction early October, but has probably revived its downtrend in the second half of the month. As we get into a new month of trading, the cryptocurrencies’ continue to fall in respective channels, but these channels look vulnerable.
Bitcoin rallied from a new low on the year at 275 to 418 by mid-October, after which, we can see price retreating in a falling channel. The technical conditions have shifted back to the bearish mode. 1) The moving averages are sloping down and are bearish alignment, while price is trading below them (200-, 100-, and 50-period SMAs). 2) The RSI has pushed below 30, and held below 60, even 50, showing maintenance of the bearish momentum.
No, the market is starting the week with a near-term bullish attempt. If price pushes above 362, it would break above the channel and above the cluster of SMAs, as well as some common highs from price action a couple of weeks ago. This scenario would signal further bullish correction/consolidation, especially if the 4H RSI pops up above 60.
however, if price can hold below 360 for the most part, forgiving a brief break above, the bearish outlook should remain especially if the RSI holds below 60. Pushing back below 340 (a previous low on the year), should then revive the downtrend with pressure remaining on the 275 low.
Litecoin is in a similar predicament. After rallying from 3.38 to 4.23, it has retreated in the second half in a falling channel as we can see in the 4H chart.
So, far the technical conditions remain bearish. A break above 3.85 would be needed to clear above the channel, the moving averages and a previous support/resistance pivot. That would signal further consolidation, with upside to 4.23. However, if price holds below 3.80 for the most part, the pressure remains toward the 3.33-3.38, August-October lows. Below 3.30, the 2014 low of 2.21 comes into play.
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