Bakkt’s long-awaited Bitcoin futures contracts launch did not elicit the market reaction most traders were hoping for. Instead, Bitcoin continues consolidating without a clear sign of where it’s heading next while altcoins are giving mixed signals. The following technical analysis will focus on the different scenarios that could play out for Ethereum, XRP, and Litecoin.
Since the beginning of the month, Ethereum surged nearly 37 percent to reach a high of $225 on Sept. 19. Following the recent peak, Ether retraced 9 percent. Now, a number of indicators are signaling a further decline.
A spinning top candlestick pattern developed on ETH’s 3-day chart. This technical formation represents indecision about the future direction of this cryptocurrency since neither the bulls nor the bears were able to gain control of the price action.
Nonetheless, the current candlestick appears to be moving below the 150-three-day moving average. This, in combination with the spinning top candlestick pattern, increases the probability of a correction.
If Ethereum indeed closes below the 150-three-day moving average, which is acting as a strong point of resistance, its market valuation could experience a sharp decline down to the 100-three-day moving average: $181.
Conversely, a spike in volume that allows ETH to close above the 150-three-day moving average could signal the start of an uptrend that takes this cryptocurrency up to the 200-three-day moving average: $317.
Adding to the bearishness, the TD sequential indicator recently presented a sell signal in the form of a green nine. This technical index predicts a one to four day correction or the beginning of a new countdown.
By measuring the Fibonacci retracement indicator from the high of $363 on June 26 to the low of $164 on Aug. 29 on the 1-day chart, one can identify a series of support and resistance levels that may play a role in ETH’s trend.
Ethereum is currently testing the support zone given by the 23.6 percent Fibonacci retracement level that sits around $211. Breaking below this area may allow ETH to continue depreciating and test the next level of support, around $196 at the 16.18 percent Fib.
If the 16.18 percent Fibonacci retracement area is not able to contain the price of Ethereum, the chances for a further decline down to the setup trendline at $181 increases. This will coincide with the bearish scenario presented on the 3-day chart.
XRP recently went through a major upswing that pushed its price up nearly 30 percent. More than $2 billion were injected into its market capitalization within six days. Although the reasons for the sudden surge are unknown, its presumed that it may be the first market response to a series of partnerships announced by Ripple.
Ripple recently revealed the addition of Xendpay, a U.K.-based remittance firm, to its pool of clients for its global settlements platform, RippleNet. The partnership will allow Xendpay to target new markets like the Philippines, Vietnam, and Indonesia and support currencies that were inaccessible in the past.
In addition, the distributed ledger startup became MoneyGram’s key partner for cross-border payment and foreign exchange settlement in June. The two-year contract will enable MoneyGram to send money from one currency and get it instantly settled in the destination’s currency with the help of xRapid.
Despite the bullish momentum that XRP had, it has now lost 18 percent of its value in the last few days. This could be attributed to the fact that Ripple is reportedly increasing its sales of XRP, pushing other investors to take profits at price jumps. The sell-offs XRP is experiencing are so significant that more than 3,600 disgruntled investors signed a petition entitled “Stop Ripple Dumping.”
As a result, the current sentiment around XRP is uncertain. One of the most practical ways to interpret its price movement is by drawing a series of support and resistance levels on its 3-day chart. These price hurdles are essential to determine which direction XRP’s market valuation will move.
At the moment, it seems like XRP was able to move above the $0.30 resistance level to test the next level of resistance at $0.33. But, since it failed to break above it, XRP pulled back to the $0.24-$0.30 zone. This trading range represents a pivotal point on XRP’s trend.
If XRP is able to trade and remain above $0.30, then it will enjoy a bullish impulse that will take it to test the next resistance levels at $0.33, $0.38 and $0.42. Conversely, if this cryptocurrency moves below $0.24 it will likely make a lower low by reaching $0.20. Due to the sentiment around this cryptocurrency, it will be wiser to remain on the sidelines until a clear break out the $0.24-$0.30 trading range.
Litecoin is trading inside an ascending parallel channel on its 1-day chart. This technical pattern began developing in late August when LTC was trading at $62.30 and has since contained its price action.
Each time Litecoin reaches the top of the channel it retraces to the middle or the bottom of the channel and then bounces off to the top once again. Now, a similar scenario could be underway. Since LTC is currently trading around the bottom of the channel it could go up to the middle or the top, around $78 and $82, respectively.
Additionally, a reversal doji is forming under the same timeframe suggesting an end of the recent 11.50 percent multi-day correction and the beginning of a new uptrend.
The moving averages on the 12-hour chart can be used as support and resistance zones to determine if LTC will be able to bounce off current price levels. Therefore, a close above the 100-twelve-hour moving average could trigger a bullish impulse to the 150-twelve-day moving average, which is exactly what the ascending parallel channel on the 1-day chart is forecasting.
Nonetheless, if the selling pressure behind this cryptocurrency increases and Litecoin moves below the 50-twelve-day moving average it could try to test the next level of support around $64.
In fact, Ethereum is in a bearish posture aiming for a test of the $196 support level while XRP is in a no-trade zone. Litecoin, however, could be about to rebound to $82.
Since the entire market seems to move in the same direction most of the time, the different perspectives that these cryptocurrencies present are a clear indication of indecision. Thus, it will be wiser to wait for a clear break of the support or resistance levels previously explained before entering a trade.
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