- Bitcoin hitting the important support zone again and again. This is how Bitcoin could drop to $20000
- Important resistance and support zones of Ethereum and Litecoin explained.
Bitcoin:
- Bitcoin is presently valued at $26,631, experiencing a slight 0.31% increase for the day. Over the past week, Bitcoin witnessed an upward movement of 2.71%. Zooming out to the last 30 days, Bitcoin has appreciated by 2.7%.
- In the weekly timeframe, Bitcoin is forming an inverted head and shoulders pattern, and this pattern remains active. The validity of this pattern hinges on Bitcoin maintaining a weekly closing price above $25,000, which currently serves as robust support.
- In the weekly chart, key support levels for Bitcoin are found at $25,000 and $20,000, while resistance stands at $31,000. The 200-week Exponential Moving Average (EMA) serves as sturdy support, whereas the 50-week and 100-week EMAs act as formidable resistance. Additionally, the $25,270 level coincides with the 50-month EMA, making the $25,000 mark a crucial support level that shields Bitcoin from dipping below it.
- Should Bitcoin breach the $25,000 support level on a weekly basis and close below it, it will find support from the 200-week EMA and the 50-month EMA, with the next significant confluence occurring at $20,000, which also corresponds to a CME gap. CME gaps have a magnetic effect on asset prices, and a breakdown below $25,000 could see Bitcoin’s price plummeting to $20,000.
- Technical indicators indicate bearish momentum for Bitcoin, with the Relative Strength Index (RSI) at 48 and the Moving Average Convergence Divergence (MACD) in bearish territory.
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- On the daily chart, Bitcoin recently broke out of a descending wedge and surged towards levels marked by multiple resistances, including a horizontal resistance at $26,870 and resistance from the 50-day, 100-day, and 200-day EMAs.
- Currently, Bitcoin is trading below a critical resistance zone and is expected to retrace towards the next support level around $26,000. This support level is pivotal, and a breach could lead to a test of the $25,000 support. Crucially, Bitcoin maintains a higher-high and higher-low structure, with the previous low established at $24,756. A break below this level would signal the end of the bullish trend, potentially triggering a broader crypto market decline.
- While technical indicators on the daily chart are generally bullish, the RSI suggests a hidden bearish divergence.
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Ethereum:
- In the weekly timeframe, Ethereum previously adhered to a higher-highs and higher-lows pattern but deviated from it due to the August crypto market downturn. It is now operating in a bearish lower-highs and lower-lows structure.
- On the weekly chart, Ethereum’s support levels are situated at $1,500 and $1,370, with resistance around $1,750. The 200-week EMA, which previously provided strong support, is now acting as a formidable resistance. The RSI below 50 and the MACD in negative territory indicate bearish momentum for Ethereum in the weekly timeframe.
- On the daily chart, Ethereum is ensnared in a descending wedge and is encountering resistance at the crucial $1,640 level, previously a significant support. Ethereum also experienced a bearish “death cross,” contributing to negative sentiment. It is facing resistance from the 50-day, 100-day, and 200-day EMAs. To regain bullish momentum, Ethereum needs to break out of the descending wedge and establish support above these EMAs.
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Litecoin:
- In the daily timeframe, Litecoin is hovering just above a vital support line formed by connecting previous pivotal lows. Litecoin temporarily breached this line but swiftly rebounded, negating the breakdown.
- Previously, LTC broke an important horizontal support at $63, plummeting to $58. It then reclaimed this support, leading to a resurgence. Presently, LTC has support levels at $57 and $50, while significant resistance levels are at $68, $72, and $84. The 50-day EMA poses strong resistance. Technical indicators suggest bullish momentum for LTC, but a move by the RSI above 50 would provide stronger confirmation
- Overall, these cryptocurrencies are facing various technical patterns and support/resistance levels, and their performance will largely depend on their ability to break key barriers or maintain crucial support levels in the coming days and weeks.
Conclusion:
- In conclusion, the cryptocurrency market, led by Bitcoin, Ethereum, and Litecoin, is currently navigating a complex landscape of technical patterns and price levels. Bitcoin’s inverted head and shoulders pattern in the weekly timeframe remains active, with a pivotal support at $25,000. A breakdown below this level could trigger a descent towards $20,000, aligning with a CME gap. Technical indicators indicate a bearish momentum for Bitcoin.
- Ethereum, on the other hand, has shifted from a bullish higher-highs and higher-lows structure to a bearish lower-highs and lower-lows pattern due to recent market turbulence. It faces resistance at $1,750 in the weekly timeframe, with the 200-week EMA now acting as a strong barrier. Ethereum’s daily chart shows it trading within a descending wedge, with resistance at $1,640. The presence of a “death cross” adds to negative sentiment.
- Litecoin has shown resilience by rebounding from a breakdown of its key support levels. It currently holds support at $57 and $50, with resistance at $68, $72, and $84. Technical indicators suggest a bullish momentum, but confirmation awaits the RSI’s move above 50.
- The cryptocurrency market is at a critical juncture, with key levels and patterns defining its future direction. Traders and investors should monitor these levels closely as they can provide valuable insights into the market’s sentiment and potential price movements in the days and weeks ahead.
Charts from TradingView
The information provided in this article is for informational purposes only and should not be considered financial advice. The article does not offer sufficient information to make investment decisions, nor does it constitute an offer, recommendation, or solicitation to buy or sell any financial instrument. The content is opinion of the author and does not reflect any view or suggestion or any kind of advise from CryptoNewsBytes.com. The author declares he does not hold any of the above mentioned tokens or received any incentive from any company.
