Crypto Market Commentary: October 2018
Nov 07 2018 · by Muneeb Khan
Category: Market Analysis
Looking for cryptocurrency market movement and technical insights? Our Senior Trader, Muneeb Khan gives a technical analysis and break down for the last month on a range of cryptocurrencies.
After the February low, the price of BTC has been coiling as volatility has decreased. At one stage, it appeared as BTC was laying the foundation for a Descending Triangle formation, which typically appears at market tops, but that has been invalidated as the price has moved too far out into the apex.
In the interim, we’ve had two false breaks from the contracting range: one to the downside and the other to the top side. For a break to be valid, there needs to be momentum behind the move. Low volatility is usually a precursor to high volatility and vice versa. As such, we are poised for a strong move in either direction and based on the evidence available it is likely that move will be to the downside. The line in the sand is the $5,775 level. A weekly closing beneath that level will open up the downside.
Unlike BTC, we can see that ETH has been making a sequence of lower lows and lower highs and is firmly entrenched in a downtrend. We can see that after there was a divergence between price and the RSI from 24 April to 5 May, the RSI has not been able to recapture the 60 level. Furthermore, another divergence formed between price and RSI from 14 August to 12 September. Typically, a divergence can imply a possible change in trend.However, for that to occur, we need to see ETH recapture $250 by closing above overhead resistance and recapturing the 50 RSI level. If ETH fails to retake the $250 level, we could get another leg lower.
XRP experienced an explosive move recently gaining close to 200% from 18 to 21 Sep. Since then, price retraced before finding support at the 78.6% retracement level of the move higher. We can see as this swing low was made the RSI was also finding support at the 40 level. Since then, XRP has recaptured the 50 level and is continuing to push higher. From here, we should expect to see a re-test of the the prior swing high at 0.79.
We can see that LTC has been making a sequence of lower lows and lower highs. We have also had two separate divergences between price and RSI. The first from 24 June to 14 August and then from 14 August to 12 September. Neither of these led to sustained moves higher and during each attempted move higher the RSI was only able to recapture the 50 level on the RSI for a brief period.
However, there may be a more meaningful Head & Shoulders Bottom pattern developing. If this pattern is validated and we see a break to the topside from the right shoulder, which would also coincide with a break of the down trendline, this could imply a move towards $80.
BCH has recently broken a downtrend line and is now testing a second overhead trendline. The $661 will be key as it has been a pivot point of late, if BCH is able to clear this level we should see a move towards $900. The recent price action is has been quite constructive to a move higher as yesterday was an inside day and we have now broken to the top of that.
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Trading in bitcoin and other cryptocurrencies is speculative in nature, and comes with inherent risks. The analysis provided by Bit Trade is for informational purposes only, and should not be construed as investment advice.
Category: Market Analysis
Oct 02 2018 · by Rabbi Ahmed
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