Bitcoin bounced back down as we were suggesting last week. The recent price action had only confirmed the strength of resistance range between $4000 (round figure) and $4214.5 (the top of the range in early January). Moreover, Bitcoin price was consolidating losses almost all of the previous week in a comparatively tight sideways range (yellow) between $3945 and $3830. There were three attempts by the bears to breach the bottom band of the range but the bulls were stepping in with heavy buying, supporting the leader among cryptocurrencies. As long as BTC/USD stays above the support level of $3747.8 (the highest close on February 10), the upside pressure will still be likely, despite the recent losses which should be taken as the technical retracement so far. The technical reason is that there are still higher highs on the table, suggesting an uptrend continuation rather than a bearish breakout. We would be looking to go long on Bitcoin in case of the bears would try to test $3650/3700 one more time and fail. Lond shadows and whipsaws intraday would give us a trading signal to jump in, underlining that the bulls are ready to fight. The resistance levels remained the same: $4000/4200 where we would consider taking profits and have a wait-and-see position. Another trading strategy is the breakthrough approach with postponed sell-orders below the support range, however, that would be dangerous and risky as the market showed sustainable demand.
Although Etherium was among the most losers last week, we still suppose that the uptrend is in play and here is why. First, the daily close price on February 23 ($161.54) was higher than the local top charted on January 6 ($160.84), maintaining the higher highs technical sequence. Second, there are still no daily close prices below the 50-days exponential moving average which works as the support after Etherium breached the blue curve on February 10. Of course, that advantage could be eliminated as early as this Monday of the daily close price was clearly below the support. However, there are still chances for a bullish bounce which would confirm our suggestion. Third, the Relative Strength Index is still in positive territory. We had only modified the oscillator’s period to 21 days instead of the default settings of 14 days just to take in the count a wider picture. Therefore, technically, the recent decline is nothing but the technical retracement needed to reload intraday oscillators which were extremely overbought after the last weekend’s wild price action. There is also one factor pointing to a bull market - the green ascending trendline which should work as the support level. We would consider going long conservatively on Etherium if the bears would have tested that green line, while an aggressive approach suggests buying ETH/USD right by the current market price and placing stop-loss order below that support, or even adding more volume as a Plan B.
Our suggestion that Litecoin overperforms the crypto market was confirmed last week. The Ichimoku Cloud trend indicator is still bullish with quite a confident span’s positive surplus and all three lines in the right order to proceed with the buying pressure. Moreover, the conversion and baseline did not change the angle of the uptrend despite the recent downside pressure which only confirmed our bullish assumption. In addition, Ichoku’s baseline worked perfectly last week, supporting the Litecoin price after the sharp sell-off, which was nothing but the technical healthy retracement with the goal to kick retail traders out of the market. We would insist on our bullish view for LTC/USD on the medium- and long-term, however, a possible re-test of the baseline (brown curve, $44 currently) is possible in the short-term perspective. That support should be considered to go long on Litecoin for conservative traders. Those crypto investors who are not patient enough could thin about buying the coin right by the market price with an option to add more volume in a worst-case scenario. As long as the technical outlook remains positive, we would not recommend selling Litecoin.