February 5, 2019

Crypto Technical Analysis. February 5.


Bitcoin’s sustained trading below $4,300 in the last couple of months indicates that the market is setting the stage for another leg lower. A penetration of the $,3,100 technical level would signal that this downward move has been triggered. At that point, bitcoin will first target the psychological $3,000 support. A potential breakout there will open the way for a more massive slide toward $1,825.


Inability to break below $ 3100 would only extend the range between $3,100 and $4,200, but will not negate the bearish outlook described above. Only a violation of the $4,300 resistance, which is not our preferred scenario, would shift the mid-term outlook to positive.


We have a preference for short positions around $4,000-4,100, with stop losses at $4,400. Profits should be booked at $3,200.


The two failed attempts on the $160 resistance eventually led to a more substantial slide, which cleared the $110 support; afterwards, volatility subsided. Last week’s trading has been confined to a tight range between $100 and $109.


Our expectations are for ethereum to eventually break below the psychological $ 100. This in turn will pave the way for a test of the $80 lows, registered in December 2018. For this scenario to prevail, the cryptocurrency should keep on trading below $160.


We prefer to abstain from opening positions here and passively await to see how the situation will unfold, as the current risk-reward ratio does not justify trading on this front.


One can clearly see on the chart the series of lower lows forming from September on, and the flat bottom at $0.28. This pattern, known as a descending triangle, indicates that ripple’s downtrend will be extended further as soon as the firm $ 028 support is violated. Should this happen, the cryptocurrency will target $0.2470, en route to $0.2240.


We are looking to sell ripple at a level close to $0.3070, with take profits at $0.25. Stop losses should be placed above $0.34.