The Perfect Reversal Chart Setup for Cryptocurrencies
Yesterday evening, I posted an update on cryptocurrencies. Most digital currencies had been declining, but because they were off the lows,
Yesterday evening, I posted an update on cryptocurrencies. Most digital currencies had been declining, but because they were off the lows, a ray of hope remained on the horizon. Bitcoin had dived to approximately $9,000, but was pulling back and testing the $10,000 level once again.
The pullback continued up until the last few hours of the day, and the day closed with Bitcoin above $11,000 and a very interesting chart setup, as all cryptocurrencies retraced higher.
The daily chart setup is pointing up
As we can see from the weekly Bitcoin chart, the price bounced off the 20 SMA (grey), which also occurs on the Ethereum, or Litecoin charts. The price yesterday bounced from one moving average to another- for Bitcoin, it was the 20 weekly SMA, whereas for Litecoin it was the 100 daily SMA. For Ethereum, the 50 daily SMA provided support.
This was yet another bullish sign, with another on its way. A few hours later, the daily candlestick had closed, forming a doji, or pin in all major cryptocurrencies. Being that dojis and pins are reversing signals, this was the strongest bullish signal for this market.
Bitcoin traders had their way with the $10,000 level yesterday, so from here on in things on their end should be quite stable. We should now expect cryptos to reverse higher, resuming the uptrend. Today, the price continues its slide, although not quite as rough as yesterday’s. For now, let’s hope that the bullish chart setup will function.
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