Cryptocurrencies have been in free fall for the past few days with the recent sell-off in prices taking the crypto-bloc towards the yearly lows. Here are the levels to know in Bitcoin, Ethereum and Ripple as prices approach critical make-or-break support thresholds.
Bitcoin Daily Price Chart (Log)
Notes: Earlier this month we noted that, “The risk remains lower while below 11171 with basic trendline resistance extending off the record highs further highlighting this region. Interim support remains steady at 9222 with a break lower targeting the 200-day moving average at ~8915 and 8159 where the 61.8% retracement converges on the March 2017 trendline support.” Prices are testing this region now with today’s swing low reversing sharply off 2018 low-day close at 7737 (low registered at 7682) - It’s make-or-break here for the cryptocurrency near-term.
Note that daily RSI turned ahead of the 60-threshold for the past two months with this decline taking the momentum signature back below 40. The current momentum profile continues to highlight the downside risk for prices.
Bottom Line: Bitcoin prices are testing major support- look for a reaction here with a weekly close below risking substantial losses for the cryptocurrency towards support targets at the yearly close-low at 6874 and 6039. Interim resistance now stands at 9222 with a breach above 11171 still needed to mark resumption of the broader uptrend.
Bitcoin IG Client Positioning
- A summary of IG Client Sentimentshows traders are net-long Bitcoin- the ratio stands at +2.79 (73.6% of traders are long) – bearishreading
- Long positions are 3.3% higher than yesterday and 8.6% higher from last week
- Short positions are 3.4% lower than yesterday and 1.3% lower from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Bitcoin prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger Bitcoin-bearish contrarian trading bias from a sentiment standpoint.
Ether Daily Price Chart (Log)
Notes: In my previous Cryptocurrency Technical Outlook I noted that, “Ethereum prices have continued to consolidate just below basic trendline resistance extending off the February highs. Key near-term support is eyed at 7670/83 where the yearly low-day close converges on the 50% retracement of the rally off the lows.” Ethereum prices broke below this threshold less than a week later with the