Crypto Analysis (26 Aug 2021):
Bitcoin has climbed about 70% since prices bottomed in July. The cryptocurrency has reversed over 50% of the sharp decline witnessed from April through May.
BTC/USD appears to be trading higher within a bearish Rising Wedge chart formation. While the pattern could hint at a top if prices break lower and find confirmation, BTC’s near-term uptrend remains intact.
This is underscored by a bullish crossover between the 50- and 200-day Simple Moving Averages (SMAs). However, there are a couple of warning signs hinting to proceed with caution.
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The first is a bearish Shooting Star candlestick pattern. This is a sign of indecision, but thus far prices have failed to materially find downside confirmation. Meanwhile, negative RSI divergence shows that upside momentum is fading.
A daily close under the midpoint of the Fibonacci retracement at 46849 exposes the 38.2% level at 42589. Further losses may then place the focus back on the SMAs which could reinstate the focus to the upside. Otherwise, BTC/USD could set itself up for a retest of current 2021 lows. Resuming the uptrend exposes the 78.6% extension at 57173 towards the all-time high of 64899.
Chart Created in TradingView
Ethereum also finds itself reversing most of the sharp decline seen earlier this year, rising about 90% since bottoming in July. Lately, momentum has been materially slowing, as highlighted by steep negative RSI divergence on the daily chart below. This could precede a turning point for ETH/USD. A confirmatory close under the 20-day SMA would expose the 50-day line. Continue reading with DailyFX...