Since reaching a high near the end of June, the majority of the cryptocurrency market has been on a downward spiral. This movement has been largely explained by the close proximity to the halving date, before which the price has historically decreased. Therefore, it has been considered a part of a correction, rather than a downward move in itself.
According to our analysis, most major coins are very close to initiating their reversal, as outlined by their Fibonacci levels. The Fibonacci tool is used in order to determine the most likely levels that can initiate a reversal.
The price levels for the closest support area are given in the table below.
|Fibonacci Level||Price Level|
Cryptocurrency trader @tradingroomapp outlined that several well-known cryptocurrencies are very close to significant Fibonacci support levels, suggesting that a reversal might soon ensue.
Here is something for you
— Trading Room (@tradingroomapp) October 23, 2019
The coins mentioned are:
- Bitcoin Cash
They comprise five of the top 7 cryptocurrencies ranked by market capitalization.
What does this mean for the future? Let’s analyze.
Ethereum & EOS
Looking at the Ethereum price, we can see that the decrease stopped temporarily at both the 0.5 and 0.618 fib levels. However, it has fallen through the latter and is currently heading downward.
The next support level is found near $140. Besides the Fib level, there is also support in the form of a previous trading range.
On the other hand, EOS enjoyed a significant bounce at the 0.786 level, increasing by roughly 30%.
However, it has currently fallen right through and seems to have made a double bottom near the 0.88 level at $2.36.
The combination of a bullish pattern at a significant support level is a very bullish sign.
Litecoin & Bitcoin Cash
Bitcoin Cash was subject to a more rapid decrease than other cryptocurrencies. it dropped all the way to the 0.618 level without retracing at all. From there. it initiated an upward move lasting slightly more than a month.
However, the September 24 decrease caused it to fall beneath this level. The next support level is found at $174 near the 0.786 level.
Litecoin has been consistently decreasing since late June. While it enjoyed temporary bounces, none of them were significant.
Currently, it is slightly below the 0.786 level which is at $50, possibly indicating a breakdown.
Bitcoin has also been decreasing since June. It initially found support at the 0.328 level, before breaking down on September 24. Currently, it is right at the 0.618 fib level.
Out of the five coins, it is the one that has retraced the least. This is understandable since it has been historically less volatile than altcoins.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.
Images are courtesy of Shutterstock, TradingView.
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