The mood in the crypto markets in late summer (for northern hemisphere types) has broadly been one of cooling off, after the blistering volatility in H1 has diminished into ever smaller movements on the charts. Bitcoin (BTC) is clearly in some sort of consolidation range, likely an accumulation period for long term investors.
In this long term price analysis, we will start with OKEx’s proprietary exchange coin OKB before moving on to Bitcoin (BTC), Litecoin (LTC), and Ethereum (ETH) for a broad canvass of some of the most popular cryptos.
Looking first at OKB’s Bitcoin trading pair, we see an impressive performance from mid-summer is continuing. OKB did a 2x from its lows in the second half of July, and the exchange token has notable given back almost none of these gains. Any retracement seems to have stopped at the 0.382 Fibonacci level, which broadcasts bullishness.
We see on the 12-hour chart above that RSI strength shook out from overbought conditions even as OKB made some big jumps off of the taken support zone (which is perfectly confluent with the 0.382), complete with a couple of hidden bull divergences (hidden bull divergences suggest continuation in trend). The histogram has been trending up, and MACD seems like it cross back up bullish soon - and do so on the positive side. Volume seems to be coming alive again after some period of flat.
In all, this is a very promising picture. OKB could well have another leg up soon, as it has shown textbook strength after taking its new level during the summer. Looking at the 3-day chart, and measuring the same distance of the previous range, we see that a similar performance from the present lows could put OKB up to 45,000 sats. The trend here is clearly up.
Bitcoin is likely in a consolidation period, as evidenced most of all by the continuously diminishing volume profile.
The daily chart helps us understand, and it seems that at least one, but perhaps two, consolidation patterns are playing out. An uptrend line with contact points from all the way back in February inform the structure of a sideways triangle consolidation; but more recent price action formed by the shot to $14,000 in June produces a falling channel pattern.
The 33 exponential moving average (EMA) has been very important for Bitcoin in 2019, and we see that the leading crypto is oscillating around it, so far unable to retake it. Coming down to the 4-hour for some detail, we see that even here the volume is consolidating.
A clear bull divergence visible here on the RSI. The MACD has also just crossed bullish and may soon reach positive territory. This is an important moment, because if Bitcoin cannot break back above $10,600 soon it will most likely lose the triangle pattern and revert to the channel pattern - whose bottom is confluent with a number of other levels in the $8,000 region and even below.
Litecoin’s situation is not too different from Ethereum’s (see) below, in that it’s been looking for a bottom all month after a retracing from mid-summer highs. Ranging within deep support from the 2018 bear market bottom, we see signs of strength in the form of obvious RSI bull divergence.
But price here is still very much being contained at the 9-day EMA. Volume has been declining giving us the sense of accumulation, hopefully near the bottom.
Looking on the gigantic weekly chart, we see a rather unnerving picture. LTC/BTC, like Ethereum before it, is ranging on top of rock bottom support that has not been breached since March of 2017. And like Ethereum, Litecoin is testing this level for the third time since then. In ETH’s case, this level broke in a capitulation event - and since we have no confirmation that Litecoin has found its own bottom versus BTC, we must consider a similar outcome.
A possible argument that this won’t happen to Litecoin is that: perhaps Ethereum’s fall is more closely tied to the end of the ICO era writ large, which is a problem Litecoin is disconnected from.
Speaking of Ethereum, this leading altcoin is looking better and better lately. On the daily chart, we can see a healthy series of bull divergences on the RSI. The first resistance level of this potentially bottom-forming structure, at ₿0.01920, has been tested in the last couple days. This is also where the 21 EMA is trending.
The MACD is trending up although way below the positive side. Assuming that ETH will someday resume an uptrend of outperforming Bitcoin (a cautious assumption, I know), the MACD has plenty more shaking out to do before it can regain the positive side of the range. But in the medium term, ETH may get a little upside soon - if it can get the volume.
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