Over $28 billion flooded the cryptocurrency market in the last 24 hours. Despite the massive inflow of capital that pushed the entire market up, a technical indicator estimates that Ethereum, Litecoin, and EOS could soon retrace before continuing their bullish trends.
The infamous sell signal
The TD sequential indicator is currently presenting a sell signal across the 12-hour chart of Ethereum, Litecoin, and EOS. The bearish formation is given in the form of a green nine candlestick. This technical index estimates that these three cryptocurrencies could undergo a correction for one to four candlestick or begin a new bearish countdown.
After the recent rally, a bearish impulse could be considered as an opportunity to let sideliners back into the market. As investors re-enter the market, the new capital inflow could push these cryptocurrencies into higher highs.
For now, the following technical analysis evaluates where Ethereum, Litecoin, and EOS could go if the sell signal is validated.
Ethereum surged over 18 percent in the last 24 hours. This cryptocurrency went from trading at a low of $143.50 to a high of $170. Now, ETH could have found an exhaustion point that may allow it to retrace before surging higher.
If the bearish signal presented by the TD sequential indicator is confirmed, then Ethereum could plunge to look for support around the 23.6 percent or the 38.2 percent Fibonacci retracement level. These levels of support sit at $157.40 and $149.65, respectively. Such a bearish impulse can be considered as a small pullback that keeps the uptrend healthy.
According to Willy Woo, Litecoin could be leading the recent run-up in the cryptocurrency market. If this is correct, then a downward push by this crypto could bring the entire market down with it. Although LTC’s price action cannot be considered definitive proof of where the market is going, it could provide guidance about the future market valuation.
Based on the TD sequential indicator, Litecoin could be bound for a one to four candlestick correction. A spike in the selling pressure behind this cryptocurrency could push its price down to the 23.6 percent or the 38.2 percent Fibonacci retracement level. These levels sit at $54.73 and $51.20, respectively.
EOS skyrocketed over 30 percent in the past 24 hours. It is possible that the massive bullish impulse took it to reach an exhaustion point. If this is correct, then EOS could also be bound for a pullback.
A bearish impulse could take EOS down to the 38.2 percent Fibonacci retracement level. This is also where the setup trendline sits, which could serve as a significant area of support. If the 38.2 percent Fibonacci retracement level holds, EOS could bounce off this zone into higher highs.
The cryptocurrency market appears to have entered into a fear of missing out (FOMO) stage. The rapid increase in buying orders pushed the total market capitalization up over 12.50 percent in the last 24 hours. Now, the TD sequential indicator is presenting a sell signal across multiple cryptocurrencies including Ethereum, Litecoin, and EOS. It remains to be seen whether the bearish formation will be validated.
It is worth noting that if the price of any of these cryptocurrencies moves above their respective green nine candlesticks, the bearish outlook could be invalidated. If this happens, one could expect higher highs.
Posted In: Altcoins, Technical Analysis