Analysis of cryptocurrency prices: the likelihood of development of a medium-term correction
Dmitry Gurkovsky, leading analyst of RoboForex, tells about further possible scenarios for the movement of the price of bitcoin and several popular altcoins.
The current week on the cryptocurrency market is under the “fanfare” of a developing correction. Previously, we have repeatedly drawn attention to the slowing downward dynamics, the formation of convergence and attempts to storm the highs. And as a result of this long and thorough preparation for the rollback, the beginning of the week showed bright bullish moods of market participants.
The current technical picture suggests the possibility of developing a correction for the medium term. If we generalize the situation on the cryptocurrency market, then we can say that the market is adjusted before the final impulse to decline. Most likely, next year will be the year of the formation of the bull phase.
On the 4-hour BTC chart, we see that after a slow renewal of the minima, a prolonged formation of convergence on the MACD and testing the resistance of the downward corridor, the quotes broke through it and successfully reached the target resistance line of the upper projection channel. Speaking of correction, it should be noted that the current growth momentum is approaching the first target level – 23.6% on the Fibonacci scale ($ 3,930.00), and the next target will be the level of 38.2% ($ 4,427.00). In the short term, there is a local decline. Key support is at a minimum of $ 3,121.90.
When considering the 1-hour BTC timeframe, we note the formation of divergence on the Stochastic indicator. This situation suggests the possibility of a short-term rollback to a local level of support – $ 3602.00. Confirmation of this hypothesis will be the breakdown of the support line and the formation of the Black Cross on the Stochastic indicator. Having overcome the level of $ 3602.00, quotes may decline to projection support by $ 3524.00. Further, we can expect the formation of the next upward impulse.
The technical picture of the 4-hour EOS timeframe demonstrates the acceleration of the development of the correctional growth phase after the breakdown of the resistance line of the primary ascending channel. Additionally, it is worth noting that the corrective uptrend has reached a level of 23.6% on the Fibonacci scale relative to the previous downward trend. The next upside target may be the level of 38.2% ($ 3.19). The current stop in the development of the upward impulse can be interpreted as preparation for the test from the top of the overcome resistance that is now becoming support. Local support is at the $ 2.00 mark, the key one is around $ 1.55.
When considering the EOS chart on the 1-hour timeframe, we see that Stochastic forms the “Black Cross”, and the quotes try to break through the support line of the last growth channel. Together, these points speak of the beginning of a short-term retracement. As the immediate goal of the correction, it is worth considering the support level of the lower projection channel – $ 2.50, the next target may be the $ 2.23 mark.
Considering the dynamics of Ethereum on the 4-hour chart, we note that the last decline impulse could not penetrate support and, pushing away from it, successfully crossed the resistance line of the medium-term downward channel. It should also be noted that the upward impulse could pass through the level of resistance of a fractal nature and reach the target line of resistance of the projection channel. As the next target of the development of the correctional trend, it is worth considering the mark of $ 114.50, which corresponds to the level of 23.6% Fibonacci. Fixing quotes above this level will allow quotes to expand the correction range to 38.2% ($ 135.50). Support is still at a minimum – $ 80.86.
The 1-hour timeframe Ethereum demonstrates testing on top of a broken target resistance line. In addition, the observed formation of divergence on the Stochastic indicator may mean an approximation of a short-term retracement. Its primary target will be a local support level of $ 98.50. The breakdown of this level and the “Black Cross” at Stochastic will confirm the forecast. The main goal of the corrective decline will be the level of $ 93.00.
When reviewing the technical picture of BCH on the 4-hour chart, it seems that the cryptocurrency that has reached the “bottom” has rebounded from it. But the market has previously warned us about a possible correction, forming convergence on the MACD indicator. The correctional growth impulse was very rapid, which allowed the quotes to reach the calculated goals in the shortest possible time. Evaluating the overall correction potential, the main growth targets are 23.6% ($ 206.75) and 38.2% ($ 289.60) on the Fibonacci scale.
On the 1-hour BCH chart, one can observe the development of a rapid growth impulse, the goal of which may be the level of $ 127.15. At the same time, a divergence is formed on the Stochastic indicator, which, in turn, may mean an approximation of the correction. As its goals it is worth considering the levels of $ 110.82 and $ 105.05.
The 4-hour XRP chart demonstrates perhaps one of the fastest corrective growth impulses among the “top” cryptocurrencies. After convergence on the MACD indicator and testing the resistance line of a long-term downward corridor, the market did not “stretch the pleasure” and with a powerful “jump” overcame the distance twice the width of the primary channel, which is quite rare. In addition, it is worth noting that the correctional trend is approaching the level of 38.2% on the Fibonacci scale ($ 0.3863), and the passed level of 23.6% ($ 0.3446) can serve as local support. As the main goal of the correction, we can consider the level of 50.0% ($ 0.4195).
When considering the 1-hour XRP timeframe, we see that the short-term dynamics is supported by a steady increase in quotations. At the same time, the formation of a divergence on the Stochastic indicator can mean an approach of a rollback. The primary goal of the corrective decline will be the local support line – the level of $ 0.3510. Its breakdown will open the way for quotes to further reduce to the levels of $ 0.3294 and $ 0.3050, which serve as the basis of local support.
Attention! Forecasts of financial markets are the private opinion of their authors. Current analysis is not a guide to trading. RoboForex is not responsible for the results of work that may arise when using trading recommendations from the submitted reviews.
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