Analysis of Cryptocurrencies: Bitcoin, Ether, Litecoin and Bitcoin Cash

5 min read

Dear Traders,

today’s article focuses on the cryptocurrency market due to its high price volatility and large price swings. If you are skeptical of trading cryptos, make sure to check out our crypto guide (soon to be released) because its lists all of the pros and cons of trading cryptos.

The main question now is: are cryptos well positioned for a strong retracement? My analysis indicates that today (Friday) is a critical day for the crypto markets.

Today’s analysis will be reviewing the daily charts of Bitcoin (BTC/USD), Litecoin (LTC/USD), Ether (ETH/USD) and Bitcoin Cash (BCC/USD).

Bitcoin’s Retracement Could Go Deeper

Our 28 August analysis of BTC/USD mentioned the potential for a bullish breakout above $4400 with a target at $5000. The bullish trend continuation did indeed occur and price has made a bearish bounce at the mentioned target of $5k. But now the main question is: what’s next?

When price builds a retracement within a trend, the best approach is to use a tool that measures how far price can retrace: the Fibonacci retracement tool. Let’s place the Fib tool on the most recent price swing so we can see the potential bouncing spots. Price did indeed bounce at the 38.2% Fibonacci retracement level but is Bitcoin showing enough bullish momentum? Bitcoin seems to be hesitating with an immediate break and continuation above the recent top.

If today’s daily candle fails to break the top at $4950, then a three wave correction (orange lines) could be a possibility for BTC/USD. Price could make a correction make into the $3500-$4000 zone, which could be cause a bullish bounce.

The next target for either a bullish break above $4950 or a bullish bounce at $3.5-$4k is at $5,500.

Litecoin’s Recent Acceleration

Litecoin (LTC/USD) doubled in value from $45 to above $90 before falling back to the 61.8% Fibonacci level at $61.50. Although the bullish rally took LTC/USD back above $80, it has not yet managed to break above the top at $93.80. Also with LTC/USD today’s daily candle could be an interesting clue whether price will continue with the uptrend immediately or whether a retracement is possible.

A break below yesterday’s low at $77.90 could indicate a potential bearish retracement towards $70, $65 and even perhaps $52.50. The latter target, however, is the least likely. These retracement levels is where price can resume its uptrend towards the main target at the round level of $100.

Ether’s Test of the Top

Ether (ETH/USD) has tested the previous top (red box) but failed to break above it. The retracement fell back below support (dotted green) and bounced at the 38.2% Fibonacci level at $294 but a larger correction seems likely when we analysis the waves. A larger ABC correction (purple) could take price back (red arrows) to $232 or $189 before the uptrend resumes (blue arrow). Alternatively, a break, pullback and continuation pattern is also a potential bullish trade setup (green arrows).

Bitcoin Cash Making its First Step

The Bitcoin Cash (BCC/USD) chart is still very new because it recently made a break (hard fork) away from Bitcoin. The volatility was high at the beginning but eventually price settled around the $300 mark. Price made a strong bullish break mid August almost reaching $1,000 before making a bearish corrective pattern. Recently price has made a bullish break and price could be ready for an uptrend continuation. There are two possible ways of trading this price structure:

  • Breakout, correction pattern, continuation (green arrows).
  • Pullback and bounce (blue arrows).

Many green pips,

Chris Svorcik

More info on our ecs.SWAT course and trading system

Twitter: @EliteCurrenSea

YouTube: Elite CurrenSea

 

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