© Reuters. Bitcoin, Ethereum And Dogecoin Spike Higher: Relief Bounce Or Larger Reversal To The Upside?
(CRYPTO: BTC) was bouncing up about 4% higher during Monday’s 24-hour trading session. The crypto was strong compared to the S&P 500, which gapped down to start the trading day and was struggling intraday to trade high enough to fill the gap.
(CRYPTO: ETH) was showing relative strength, spiking up over 8%, while (CRYPTO: DOGE) was trailing the apex cryptos, trading less than 3% higher.
The crypto market suffered a bearish weekend following Federal Reserve chair Jerome Powell’s speech at the Jackson Hole Symposium on Friday morning. The weekend price action was a continuation of Friday’s move lower, that saw Bitcoin plunge 6.72% and a number of other cryptos follow suit.
Bitcoin temporarily lost an important psychological support level on Saturday and Sunday, declining below $20,000. Ethereum and Dogecoin lost over 5% and 3%, respectively, over the course of the weekend.
The three-day declines threw Bitcoin, Ethereum and Dogecoin toward oversold territory on their daily charts, which may have caused the spike higher during Monday’s trading session. Whether or not Monday’s price action is merely a relief bounce or a larger reversal will not be known for a few days, but with Bitcoin, Ethereum and Dogecoin trading in possible or confirmed downtrends, the most likely scenario is that the cryptos are working to print lower highs.
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The Bitcoin Chart: Bitcoin’s most recent higher low within its downtrend was printed on Sunday at $19,513 and the most recent confirmed lower high was formed at the $21,878 mark on Friday. Traders can watch to see if Bitcoin prints another lower high under the $21,800 level over the coming days, which could indicate the crypto will fall to form another lower low.
- If Bitcoin closes the trading day above Sunday’s high-of-day, the crypto will print a bullish engulfing candlestick, which could indicate higher prices will come again on Tuesday. If the crypto closes the trading session with a long upper wick, it could indicate the next lower high has been formed and Bitcoin will trade lower on Tuesday.
- Bitcoin has resistance above at $21,313 and $22,729 and support below at $19,915 and $17,580.
The Ethereum Chart: Although Ethereum negated its uptrend on Friday, the crypto hasn’t yet formed a lower high to indicate a downtrend is in the cards. Traders can watch for Ethereum to form a bearish reversal candlestick, such as a doji or shooting star candlestick, under the $1,722 level, to indicate the lower high has been printed, and the crypto will trade lower over the days that follow.
- Like Bitcoin, Ethereum was working to print a bullish engulfing candlestick, which could indicate higher prices will come on Tuesday. If that happens, bullish traders will want to see Ethereum regain the 50-day simple moving average as support.
- Ethereum has resistance above at $1,717 and $1,957 and support below at $1,421 and $1,245.
The Dogecoin Chart: Dogecoin was showing relative weakness during Monday’s 24-hour session, unable to surpass the high-of-day printed on Sunday. The weakness was due to lower-than-average trading volume, which suggests a lack of interest in the crypto.
- As of press time, Dogecoin’s trading volume on Coinbase (NASDAQ:) was measuring in at about 137.6 million, compared to the 10-day average of 323.83 million. The lack of volume could also indicate a period of consolidation is needed before the crypto makes a larger move in either direction.
- Dogecoin has resistance above at $0.065 and $0.075 and support below at $0.057 and 5 cents.
See Also: ‘Wolf Of Wall Street’ Says He Was Wrong About Bitcoin Hitting Zero: ‘Didn’t Look Closely Enough’
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