They’re extraordinarily volatile but it’s always possible to identify the basic trend and where prices tend to find where buying support or selling resistance.
The cryptocurrencies may be different than anything else ever traded on global markets but their price patterns are as old as any asset or currency you can name. Up, down and sideways are easy to spot. You don’t need a treatise on decentralized finance to see what’s up.
That’s the enormous value of simply examining price: for a few minutes, you can set aside the story being told about the specific crypto. Buyers and sellers of Bitcoin and Ethereum — or whatever new one you want to go with — are leaving a pattern everyday and every week.
The Bitcoin daily price chart looks like this:
From the 30,000 low in the June/July timeframe to early November’s high of 68,000 is an extraordinary upward move. Note that the relative strength indicator (RSI, above the price chart) diverged negatively from the October high to the November high.
This was confirmed by the negative look of the moving average convergence/divergence indicator (below the chart). A few days after this became apparent, Bitcoin’s price dropped to below the 50-day moving average (the blue line).
The weekly price chart for Bitcoin is here:
You can see that the cryptocurrency meets resistance above 60,000, first in March/April and then again, a little higher, in October/November. Sellers now overcome buyers at just about the 68,000 level — that’s the new resistance spot. It was the buyers who took control in June/July at just below 30,000 — that’s where support lies.
The negative divergences between RSI, MACD and price are clear on this weekly look but that can change. Note that Bitcoin remains above both its 50-day moving average (blue-lined) and its 200-day moving average (red-lined).
The daily price chart for Ethereum looks like this now:
Those are negative divergences on the relative strength indicator and the moving average convergence/divergence indicator. Not as clear or dramatic as on the Bitcoin chart, but the RSI and MACD here suggest a price climb that is declining in momentum.
Again, with the crypto continuing to trade above both its 50-day moving average and its 200-day moving average, it’s hard to call a trend change. Upward action remains in place.
The weekly price chart for Ethereum is here:
The sellers this month took over from the buyers at just above 4750. That’s the new resistance level that traders will be watching. The last time buyers showed up in force was March/June/July way down there at about 1750.
That’s a major zone of support if the September lows of 1750 are ever taken out. Note the RSI and MACD negative divergences from price. Also note that Ethereum continues to trend basically upward, well above the 50-day and 200-day moving averages.
Not investment advice. For educational purposes only. Always consult with a registered investment advisor before making any decisions.