In the present blog post we explore the technical price configuration of the three major cryptocurrencies in terms of capitalization. All three virtual currencies have surged in June are find themselves now in the middle of a vacuum between support and resistance. Although it cannot be ruled out for the May bull trend to extend higher without pausing technical conditions are now in favor of prices weakening towards identified support levels.
Bitcoin breaking above a monthly support
Bitcoin’s feat in May has been to break through and close far above the monthly 20-period average, which is encouragingly trending higher. This is a very positive sign that the 2018 bear market has ended by the turn of the year and that the bulls have now returned.
In the analysis:
we suggested that:it is fully possible to see another break higher that could bring the Bitcoin price in the $9,000 to $10,000 price zone. Whatever scenario develops – a break higher or a failure below the $8,000 level – a deep correction in the $6,000 to $6,500 should be expected that will present itself as the next buying opportunity.
Bitcoin finding itself at a significant distance from any support it is hard to believe that the major June thrust should extend higher without an intervening price consolidation. Bitcoin should retreat in the aforementioned price area with $7,000 being the most proximate support level (top yellow arrow).
Bitcoin Monthly Price Chart by the Opening of June
Ethereum under a major resistance
Ethereum finds itself in a less favorable technical set-up since none of the 20- and 7-period averages has reverted to the upside by the close of the month of May. Moreover the surge has stalled below a remarkable level corresponding to a long term line pivot going back two years. By the opening of May Ethereum appears as well to be rejected below the same trend line. There is good chance to see Ethereum retracing its May advance in direction of the $200 price level.
Ethereum Monthly Price Chart by the Opening of June
Ripple not yet out of the woods
Ripple’s technical conditions are a mix bag of positives and negatives looking better than Ethereum but still not as strong as Bitcoin. On the upside the 20-period moving average has been trending higher since the last four months and Ripple broke above the down-trending M7-average by leaving behind a significant gap.
In our recent article:
we highlighted that:It is expected for the newly developing bull trend to evolve in a less abrupt fashion and more sideways compared with the previous frantic spike from 0.20 to 3.5 in a short five weeks
It would thus be logical for Ripple to consolidate in search of a support with the 7-period moving average the sole target available below the prices where it will become attractive to go long Ripple again.