Cryptocurrency enthusiasts were less enthusiastic this week as buyers of the strange stuff failed to step up at the levels where they’d shown up earlier this year. Bitcoin, for example, tanked to below the price lows established in October. This failure to sustain a support level may turn out to be an early warning sign.
The study of price movement alone, such as this, sets aside any discussion of what the reasons might be. By keeping the focus on support and resistance levels and in what direction the trend is headed, chartists leave extensive discussion of fundamentals to others. It’s similar in simplicity to the “ball don’t lie” analysis you sometimes hear at baseball games.
Bitcoin’s daily price chart looks like this:
It’s clear that the buyers who showed up at the October low are not coming in to buy again there. Will the cryptocurrency now head to the next apparent support level in late April? That remains to be seen, of course.
Bitcoin’s point-and-figure chart looks like this:
That 7450 level is gone, as you can plainly see here. The earlier-in-the-year 7150 level has been taken out as well. The next level where buyers showed up last time – to stop a downtrend – is all the way down at 5500. This is quite a range in price: the ups and downs are wide and dramatic as seen on this point-and-figure chart.
Litecoin is a crypto alternative to Bitcoin. Did it fare better than its cousin? Here’s the daily chart:
The same basic pattern is apparent with only slight differences here and there. The main thing is: that’s a lower closing price than the October low. Litecoin’s point-and-figure chart looks like this:
It’s also showing the new low, plain as day. From this perspective you can see the steady relentness of the downtrend and that a recent attempted rally has now failed.
Ethereum, another crypto alternative, looks like this now on a daily price chart:
It’s another one with a lower low than October. Here’s the wider perspective of a point-and-figure chart for Ethereum:
Like Litecoin, you can see how Ethereum’s long down trend has now continued, after a brief attempted rally.
Note that the best known of the cryptocurrencies travel together in price, generally speaking. There’s not that much difference between them, chart-wise.
Since these prices are in dollar terms, the movement of the U.S. dollar in global currency markets is definitely worth watching when analyzing crypto patterns.
Stats courtesy of FinViz.com.
I do not hold positions in these investments. No recommendations are made one way or the other. If you’re an investor, you’d want to look much deeper into each of these situations. You can lose money trading or investing in stocks and other instruments. Always do your own independent research, due diligence and seek professional advice from a licensed investment advisor.