The crypto market showed several positive signs last week as several coins were able to recover part of recent losses. However, the overall mixture of technical factors, especially in the medium-term perspective, left many questions regarding the bullish momentum’s strength. As a result, cryptocurrencies have to be analysed separately with close attention to technical details and nuances. General market sentiment might not work as the reason for trading decisions.
Litecoin was leading the gainers among major cryptocurrencies with almost 30% spike of the price. EOS and Etherium took second and third places in the list of strong coins, adding 13% and 9%, respectively. Bitcoin strengthened by a modest gain of 5% last week, while Ripple and TRON remained almost flat. The only loser among major cryptocurrencies was Stellar, which fell by 4% in the last 7 days. The market trading volume also picked up the general optimistic bias. Bitcoin’s market cap was noticed at the level of $64.08 billion with 31% of total volume. Ripple was the second largest coin with a market cap of $12.54 billion but its trading volume was far from leaders - 2.44% only. Etherium’s market cap was registered at the level of $12.39 billion, while its trading volume rose to an impressive 15%. The tether was also popular among crypto traders (24% volume) but its market cap is still low - $2.03 billion. Anyway, most cryptocurrencies managed to add capitalization this past week.
Despite Bitcoin’s bullish rally on Friday, the mid-term technical outlook remains bearish as BTC/USD failed to break through the upper band (green line) of the descending channel shown on the four-hour chart below. There was a similar attempt on January 6 but bulls failed to break that resistance and Bitcoin price pulled back down to the bottom band of the channel as a result. The same scenario might take place this coming week given the long upside shadow of the candlestick on February 8. The nearest support is coming around the 125-bars exponential moving average (blue curve) which exactly matches the median line of the channel (green dotted). The range of $3540.0/86.8 is supposed to show the real strength of bullish momentum. If Bitcoin price was able to hold gains above that support range, then we might see another test of the channel’s upper band resistance with a potential breakout. Otherwise, a further slide toward the horizontal static support blue line ($3430.1, the lowest close price since January 29). By the way, last week’s low was also supported by that line. On the other side of the equation, the Bitcoin price of $3800.00 is still a strong resistance to crack by the bulls. If they managed to overcome that defensive barrier with daily close price, then the overall technical outlook will be changed to bullish in the medium-term perspective. Until then, further selling pressure is more likely.
Etherium has a brighter technical intraday picture. The resistance tested recently ($124.88 high) is not a classic resistance line of a descending channel but a median which was created by connecting local lows and local highs. That does not mean that the green dotted line wouldn’t work as resistance, limiting further gains. That just underlines a different nature of the barrier which is more of a consolidation obstacle, serving as a chance to reload oscillators and gain additional momentum, rather than profit-taking level. The Bollinger Band indicator (modified period of 34 bars) confirms that suggestion as the recent bullish run showed a continuation breakout signal, the same way as it happened on the other side of the band on January 28. Lower lows were noticed after that. ETH/USD stays well above the middle BB line, underlining the bullish momentum is not exhausted completely. A potential pullback toward $114.0 would be attractive to consider an aggressive purchase of call options for Etherium. However, bears might go as deep as $110.0 in the bounce attempt, so conservative traders should use a wait-and-see approach for clearer signals. Next target is $134.34 which should clarify the situation with the bullish reversal pattern. If breached, the technical outlook would turn into positive.
Litecoin is definitely ahead of the overall cryptocurrency market. The daily chart has completed a bullish reversal pattern after the recent breakthrough. LTC/USD daily close price was at the highest level since November 14, and latest top of the market posted on January 8 ($39.13) has been breached, showing the sequence of higher highs. More importantly, the Ichimoku Trend indicator (default settings) turned completely bullish. The price is well above the span, all lines are in the right order to continue the uptrend, the cloud itself charted a double-cross which is a bullish extension and continuation signal. The nearest target is a range between $48.50 (the bottom on October 29) and $55.83, the highest close price since November 6). The buy-and-hold trading strategy is still applicable, while those traders who missed the rally should hope for at least minimal pullback down in order to find better entry price. Ichimoku’s conversion line should point to the best depth for the buy-dips approach.
Although EOS was following the general tendency of the cryptocurrency market last week, there are doubts about the sustainability of that price action, from the technical point of view. First, the ascending trendline has been breached but EOS/USD slid back below it after that, fuelling a suggestion of a false break. Fast RSI oscillator diverged in the overbought zone, sliding lower, but remained positive. Slow MACD trend indicator stays also positive put a potential crossover of its lines might lead to a deeper bearish retracement. MACD histogram is reaching a negative level as well. EOS price could come back to the horizontal static support of $2.4874 which used to work as resistance. We would not recommend buying EOS till then.