Crypto Currency Trade Under Pressure and are Poised to Test Support

The cryptocurrency markets continue to trade on the defensive as risky assets are feeling the brunt of trade tariffs.

The White House continues to up the rhetoric and tariff levels, which China is matching dollar for dollar. This is generating volatility in the capital markets and is creating headwinds for cryptocurrency pairs. Cryptocurrencies were the leaders in the riskier assets that were on their way up in December of 2017, but since have been the leading the way down. That’s because riskier assets are trading under pressure. Ethereum, Bitcoin and Litecoin are all trading under pressure and are poised to test support levels.

Ethereum

Ethereum prices dropped another level this week, heading toward trend line support. They came in at nearly 411. A break of this level and support near the June lows of 404, would lead to a test of the 2018 lows which were near 363.  Resistance is seen near the 10-day moving average at 465, and then the 50-day moving average at 515.  Momentum is turning negative as the MACD (moving average convergence divergence) index is poised to generate a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is poised to cross below the zero-index level which also reflects accelerating negative momentum.  Additionally, the fast stochastic, which is a momentum oscillator, generated a crossover sell signal earlier in the week. The sell signal took place in overbought territory which points to a lower exchange rate for ETH/USD. If Ethereum is able to hold support, and close above the 50-day moving average, it could generate a test of the May highs which were near 810.

Bitcoin

Bitcoin is also trading under pressure as it approaches support near a horizontal trend line that comes in near 5,822.  Short-term resistance is seen near the 10-day moving average at 6,560. Additional support is seen near the 50-day moving average at 6,833. The upward trend in July could be at risk and will be breached on a close below the 5,822 lows. Positive momentum has decelerated as the MACD histogram has a negative trajectory. The fast stochastic generated a crossover sell signal in oversold territory which reflects accelerating negative momentum. If Bitcoin prices are able to hold support, it appears that prices could be forming a bottom. A close above the 50-day moving average could lead to a test of the June highs near 7,700.

Litecoin

Litecoin prices are having a difficult time recapturing resistance. The 10-day moving average rejected prices today near the 82.22 level. Additional resistance is seen near the 50-day moving average at 99.32. Support is seen near a horizontal trend line at 72.40. A break of this level could lead to a test of the 2017 lows of 50.25. Positive momentum has decelerated as the MACD histogram has a negative trajectory. The fast stochastic generated a crossover sell signal in oversold territory which reflects accelerating negative momentum.

 

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