By HVY Journalists: In technical analysis, it is a crucial skill to differentiate between where the market wants to go versus where you want the market to go. Over the past week, we analyzed the price action of bitcoin, ethereum, and ripple (XRP) and discovered that all three cryptocurrencies are flashing short-term bearish signals.
All three cryptos closed the previous week with big red weekly candles. This tells us that bears have taken over for now and we expect sellers to carry their momentum this week.
Bitcoin Bears Make Their Presence Felt
After failing to take out our current range high of $9,000 on May 30, bitcoin has been succumbing to selling pressure. Last week, the cryptocurrency was down by over 12 percent as it tumbled to a weekly close of $7,634.58. Currently, the bulls are fighting tooth and nail to defend our range midpoint of $7,600.
Unfortunately for the bulls, technical indicators are not on their side. The weekly RSI is still trading very close to overbought territory. In addition, the closest moving average (MA) that can act as support is the 100-week MA, and it is crawling at $6,800 levels.
Therefore, we expect bears to snatch $7,600 within the next few days and drive the market down close to $7,000. A drastic move below those price areas will likely send bitcoin to weekly support of $6,200.
Ethereum’s Breakout Rally Ran Out of Steam
Ethereum broke out of a large rounding bottom on the weekly chart on May 14 when it took out resistance of $200. The breakout triggered a rally that catapulted the cryptocurrency to as high as $289.42 on May 30.
A look at the weekly chart shows that the cryptocurrency respected our range midpoint of $282.50 as resistance. As a result, ethereum dropped by over 14 percent last week after closing at $231.30. We expect the plunge to continue this week as the market targets to retest weekly support of $200.
It is important to take note that while we expect the market to slide this week, ethereum remains bullish in the long-term. In other words, the cryptocurrency is a buy-on-dips candidate.
Ripple Bows to Selling Pressure
Just like ethereum, ripple failed to close above its current range midpoint. The inability to do so is short-term bearish as it implies indecisiveness on the part of the bulls. Consequently, the cryptocurrency bowed to selling pressure last week as it dropped by over 17 percent after closing at $0.38525.
With bears generating some momentum, we expect ripple to continue its slump this week and trade closer to weekly support of $0.36.
Nevertheless, the cryptocurrency remains long-term bullish. A closer look at the weekly chart reveals that ripple is printing a large bull flag. This is a pattern that suggests bullish continuation. As long as the cryptocurrency remains above $0.36, it will recover its bullish momentum and target $0.46 first and then $0.57.
Bottom Line: Sell the Pullback, Buy the Dip
Bitcoin, ethereum, and ripple are all flashing short-term bearish signals and are very likely to continue sliding this week. Nevertheless, all three cryptos are long-term bullish. This means that the expected pullback this week should help cool off overheated indicators. Thus, all the cryptos are buy-on-dips candidates, preferably as close to their weekly support as possible.
Disclaimer: This article is intended for informational purposes only and should not be taken as investment advice.