Last week, virtual currencies bitcoin and litecoin fell but stalled at the end of the week. Over the weekend, these two cryptocurrencies continued a messy consolidation. Let’s assess their technical conditions and get ready for the breakout.
Consolidation: The 1H chart shows a market that has been consolidating since last Wednesday (12/10), after bitcoin fell to 332.50. After that price shot back up to 357, thus setting up a consolidation range. Since then, volatility and volume has subsided as price started to drift slightly lower.
Bullish Attempt: As we get ready for the new week, price was unable to threaten the 332 low, and instead is showing some intra-session strength. Price broke above a falling speedline and the 100- and 50-hour SMAs. This would suggest some more consolidation, with upside risk first toward the 349-351 area, which contains the 200-hour SMA, and a resistance pivot within the consolidation range. We should respect this resistance even though the market has been sideways the last few sessions because the prevailing trend was bearish. Then, a break above 358 might open up last week’s highs around 370-372.
Bearish Pressure: Now, if price falls back below 340, the current bullish attempt would be a failure, and bitcoin should be ready for bearish continuation, first to test the 332.50 low.
Consolidation: is in a similar technical development, consolidating after a bearish swing last week. After tagging 3.35 (almost the August-low of 3.33), litecoin consolidated. We can see a range roughly between 3.50 and 3.35, with price in a narrow range in the middle of this range, hugging the 100- and 50-hour SMAs.
Bearish Outlook: If price holds below 3.45, the prevailing downtrend is still in play, with pressure towards the 3.33-3.35 area. Below that, the 3.0 handle, and the 2.21 low on the year will be in sight.
Bullish Correction Outlook: If price however starts holding above 3.40, and pushes above 3.45, it might threaten the 3.50 high. A break above 3.50 then opens up a bullish correction scenario, with the 3.70 high from last week in sight. Because of a prevailing bearish bias, we should probably limit the bullish outlook to resistance around 3.65. This target is also a projection of the width of the range (0.15) above 3.50.
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