Analysis of cryptocurrency prices: upward correction is not excluded
Dmitry Gurkovsky, leading analyst of RoboForex, tells about further possible scenarios for the movement of the price of Bitcoin and several popular altcoins.
Christmas, New Year's Eve week in the cryptocurrency market is held under the motto: "We complete the correction – we continue to decline." But perhaps this is only at first glance. Until significant minima have been rewritten, we should not talk about strengthening the downward trend. However, to exclude the beginning of the development of a new impulse is also not worth it. The current technical picture on the market can still be described as a short-term retracement within the medium-term correctional phase.
The wave of growth allowed the price to correct the previous downtrend by more than 30%, not reaching the level of 38.2% ($ 4,516.2) on the Fibonacci scale. The downward impulse that followed has overcome the growth channel support line, and is headed for projection support of $ 3,798.8. Breakdown of this level can be a test of the strength of the entire correction phase, as it can open the way for quotes to a minimum of $ 3,216.2.
In turn, the rebound from the projection support can be the beginning of the formation of the next wave of growth and expansion of the correctional phase. Therefore, excluding the probability of achieving correction levels of 38.2% ($ 4,516.6) and 50.0% ($ 4917.4) according to Fibonacci is not worth it in the medium term.
On the hourly timeframe we see that the start of the short-term downward trend was given at the time of the formation of divergences on the MACD and Stochastic indicators. Now the movement is stabilizing: Stochastic lies in the oversold zone, MACD goes into the negative area. This timeframe shows the picture, according to which the breakdown of the $ 3,798.8 mark may allow quotes to fall to the local support line – to the level of $ 3,509.3.
EOS demonstrates the achievement of a correction level of 38.2% on the Fibonacci scale. In addition, there is a beginning of a decline after the divergence on the MACD and Stochastic indicators. Quotes broke through the support line of the growth channel and are directed to the support level of $ 2.40. In the case of the breakdown of this level and the acceleration of the reduction, the next target will be the mark of $ 1.94, and then – at least $ 1.55.
On the hourly timeframe we see that the quotes have tested the resistance line of the downward corridor and, having repulsed, form the impulse of decline towards the support line. The focus of the MACD lines on the transition to the negative area may indicate a further drop in prices. At the same time, Stochastic has formed a “golden cross” in the oversold zone. This may indicate a rebound to the resistance line – to the level of $ 3.18.
The broadcast on the four-hour chart, having worked out the correction to the Fibonacci level of 50.0%, began a sharp decline. The downward impulse was able to approach the support line of the current growth channel – the level of $ 125.70. In this situation, it is possible to consider both a variant with a breakdown and a rebound.
The dynamics of the MACD indicator supports the option of rebound and the possibility of continuing growth to the level of $ 170.85, which corresponds to the level of 61.8% Fibonacci. But at the same time, the “black cross” at Stochastic can speak about the subsequent breakdown and decrease to a minimum at the level of $ 83.
The hour timeframe Ethereum demonstrates a rebound from the resistance line and a decrease to the support line. At this interval, the dynamics of MACD lines aspiring down supports the possibility of breakdown of support and reaching the level of $ 102.80. But as an additional confirmation, it is worth waiting for the “black cross” on Stochastic in the oversold zone.
When examining the technical picture of Litecoin on the four-hour chart, it seems that after the correctional trend of growth, the cryptocurrency is preparing a decline impulse. At the same time, the market warned about this version of the development of events by forming a divergence on the MACD and Stochastic indicator.
The correction exceeded the level of 38.2% on the Fibonacci scale, and the subsequent breakdown of the support line opened the way to a further decline. Quotes are approaching the first target at $ 30.08. Breakout of this level may allow Litecoin to fall in price to $ 25.89.
On the hourly chart of Litecoin, we observe a steadily developing channel of downward dynamics to the target support line. The confirming factors in favor of a further decline are the MACD lines, which are falling in the negative area, and the emerging prerequisites for the “black cross” on Stochastic.
The four-hour XRP chart demonstrates the completion of the correctional growth trend after reaching the Fibonacci 61.8% level. At the same time, divergences on MACD and Stochastic warned about the possibility of a reversal even earlier.
At the moment, the quotes are trying to break through the support line of the growth corridor and drop to the support line of the projection channel $ 0.3398. From this level, you can expect a rebound to the level of $ 0,4276. The breakdown with the subsequent decrease to the minimum and the support line of the long-term downtrend – the level of 0.2576 is not excluded.
On the hourly XRP timeframe we see that the quotes have tested the already overcome support line from below, and form a stable channel of decline. The developing impulse will be directed to the target mark of $ 0.3398, which is supported by the data of the MACD indicator.
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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