Cryptos May Remain Bearish while Showing Buy Opportunities

At the beginning of this year, cryptocurrencies seem to slow down their movements, and in most of the cases, they seem to follow a bearish trend. Many of these bearish movements could be associated with the rumors which emerged within the last weeks. Nevertheless, the main reason for these falls could be related to the fact that the price is adjusting its latest movements, which is not something new for traders. These bearish movements should not be considered as bad as retail traders anticipate. It is probably like other markets or financial assets which adjust previous strong movements so that to keep their major trend.

Now, it seems that price in many cryptocurrencies has retraced. Thus it is probably an opportunity to go long on these currencies. Furthermore, the rumors should be taken into account as well. Recently, we saw what happened when the JP Morgan (the institution) had stated that “Bitcoin is a fraud”. A couple of minutes after this statement, traders seemed to be being Bitcoin at a lower price. Cryptocurrencies such as Ripple, Ethereum and Monero seem to present a significant depreciation. As a consequence of this, big companies tend to use, more than ever before, this kind of currencies to make transactions.

From a technical analysis point of view, interesting entry points for cryptos like Ripple and Ethereum could be spotted.

Ripple (XRP/USD) – Daily time frame chart

On the following daily time frame chart, we may see that the price is moving closer to the previous lows. Besides this, we may note that the Fibonacci levels have been broken by 78.2%. Despite the fact we still cannot detect a test above this level, once the price breaks that level, probably we may have a new and stronger bullish trend.

Hence, if the price remains above the support area (rectangle), then we might expect a further bullish movement on Ripple.

Ethereum (ETH/USD) – Daily time frame chart

Ethereum seems to show an opportunity for a long position/trade, provided that the price presents a clear rejection of Fibonacci levels of 78.2%.

As we may see in the chart below, the price seems to be hitting the previous lows too, but now it is above the Fibonacci and support levels. This could be a good sign of a possible trend reversal. Beside this, we may notice that the price seem to form a downside trend line which might be interesting for long entries once the price breaks that trend line.

This article was written by Henrique Tomé, TeleTrade’s market analyst, and commentator.