Crypto land has taken a good beating this week…so far all major cryptocurrencies are strongly negative for the week, in some cases losing more than 15% just for this week.
Major technical breakdowns have occurred and traders using technical analysis would have been saved if they followed basic trading rules. But this is not the place to talk about trading strategies. Let’s look at BTC/USD. Major breakdown as price is breaking below a multi-month support area.
If Bitcoin manages to close the week above 6000$ this could be a fake break down and a bullish sign for BTC/USD. On the contrary, as long as price stays below 6000$ things can get ugly in crypto land….remember the euphoria back in December of 2017 at 20k? now reverse that feeling and we could see the exact opposite. As long as price is below 6500$ trend will remain bearish.
Ripple, on the other hand, is not breaking below summer lows.
Ethereum is also holding above September lows.
Litecoin is making new lows inside a wedge pattern.
Is this the start of a new strong decline or just a capitulation phase before the next bullish trend starts? Technically we have no indication of a trend reversal to the upside. The trend remains bearish in most currencies against the Dollar. If everyone will follow the leader, then keep an eye on the 6,000-6,500$ level in Bitcoin. Only a break above this area could bring bulls back in control.
Thank you for taking the time to catch up on my thinking.
