Ethereum, Litecoin, and XRP entered a stagnation phase in late November. Thus far, the buy and sell orders behind these assets are not significant enough to bring back volatility to them. The following technical analysis explores what would happen if volume picks up.
After testing the support given by 75 percent Fibonacci retracement level twice between September and October, Ethereum was finally able to break below it to hit a low $133.6 on Nov. 25. Since then, the 75 Fib became resistance while the 78.6 Fib became support. And, ETH remained trading within this zone.
Now, the TD sequential indicator is presenting a buy signal in the form of an aggressive 13 on ETH’s 3-day chart. This bullish signal could be validated the moment the succeeding green two candlestick trades above the current green one candlestick.
On a lower time frame, such as the 12-hour chart, however, Ethereum’s price action seems to be contained within the upper and lower Bollinger band. And, they are currently squeezing which, indicates ETH entered a consolidation phase. Squeezes are typically followed by periods of high volatility. The longer the squeeze, the higher the probability of a strong breakout.
Therefore, the range between the upper and lower Bollinger band is a reasonable no-trade zone. This area sits between $144 and $157.
A break above $157 could lead to an upswing to the 65 Fib at $181. Meanwhile, a break below $144 could take ETH down to the 83.6 Fib at $129. If that level of support fails, then Ethereum could plunge to $108.
XRP spent nearly 100 days trading within the $0.24 support and the $0.30 resistance level. But on the week of Nov. 18, the support barrier gave up, and this crypto plummeted to the next level of support at $0.20.
Despite the recent downturn, an Adam and Eve double bottom pattern is developing on XRP’s 1-day chart. This technical formation is considered a bullish reversal pattern.
It was created after the price of XRP dropped to $0.20 on Nov. 25, forming a V-shaped valley. Then, this crypto rose up to $0.23 on Nov. 29. And, it pulled back again to create the broader and more rounded valley near the price of the first one between Dec. 4 and 5.
A spike in the buying pressure behind XRP that allows it to break above the middle peak of the Adam and Eve pattern would signal a further bullish impulse. This technical pattern estimates that this cryptocurrency could surge to $0.26 upon the breakout point, representing a 13.4 percent upswing.
The Bollinger bands on XRP’s 12-hour could be used to determine whether this crypto is bound for a bullish impulse.
Since the beginning of December, the upper and lower Bollinger band are squeezing. And squeezes usually lead to a strong breakout. As a result, the current trading range is a reasonable no-trade zone that sits between $0.21 and $0.23.
A break above resistance could validate the Adam and Eve double bottom pattern seen on the 1-day chart. But, breaking below the $0.21 support level could take XRP to hit a new lower low. On the downside, the next levels of support sit at $0.17 and $0.15.
Since July, Litecoin’s price action appears to be characterized by a series of bear flags developing on its 1-week chart. This technical formation is considered a continuation pattern. It evolves after a significant correction that creates the flagpole. Then, the price goes through a consolidation period that forms the flag. And, it results in a breakout in the same direction as the initial movement.
The 26 percent drop that LTC went through on the week of Nov. 18 is the result of a bear flag that formed in the middle of September. Now, this retracement could become the flagpole of a new flag.
If another bear flag is indeed developing on LTC’s 1-week chart, then this crypto could soon push for lower prices. The height of the flagpole estimates a 26 percent target to the downside. If validated, Litecoin could plunge to around $32.5.
On its way down, Litecoin could find support around the following support levels: $41, $37, and $34. Breaking through all of these levels of support would take this crypto to reach the target presented by the bear flag in the 1-week chart.
Nevertheless, if LTC can close above $48.5, it could invalidate the bearish outlook and try to test the next level of resistance at $53. And, if the volume behind it is significant enough, it could try to push further to the next resistance level at $58.
For over the last two weeks, Ethereum, XRP, and Litecoin are trading within narrow trading ranges. Although there are different bullish and bearish signals forming on these assets, the lack of volume makes it difficult to determine where they would head next. As a result, one could wait for a break below support or above resistance before entering a trade. Waiting for confirmation is the best way to avoid risk exposure.
Posted In: Ethereum, Litecoin, XRP, Price Watch, Technical Analysis