Bitcoin, Ethereum, Dogecoin Retrace As JPMorgan Considers Payment Token: A Look At The Cryptos Into The Weekend
Benzinga – by Melanie Schaffer, Benzinga Editor.
Bitcoin (CRYPTO: BTC) was sliding about 2% during Friday’s 24-hour trading session, giving back all the gains the apex crypto made on Thursday following reports JPMorgan is exploring blockchain-based deposit tokens as a better solution for cross-border transactions.
Ethereum (CRYPTO: ETH) and Dogecoin (CRYPTO: DOGE) were trading lower in tandem with Bitcoin, while all three cryptos continued to move sideways within triangle patterns.
Although the triangle formations for Bitcoin, Ethereum and Dogecoin lean bearish, Bitcoin, the leader of the crypto sector, developed a bullish divergence, indicating a move to the upside could be on the horizon.
Bullish divergence occurs when a stock makes a series of lower lows over a specific timeframe, while the relative strength index (RSI) oscillator makes a series of higher lows. Divergence suggests that the bulls are regaining control and can mark an imminent reversal of a downtrend.
Divergences are best used when combined with other signals and patterns on a stock or crypto’s chart because the existence of divergence doesn’t indicate when a possible reversal will occur.
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The Bitcoin Chart: Bitcoin is trading in a descending triangle, making a series of lower highs but holding its lows near the $25,350 mark. The pattern leans bearish because each time that Bitcoin falls to that level it weakens, making it easier for the bears to drive the price lower.
Meanwhile, Bitcoin’s relative strength index has been making a series of higher lows, which has caused medium bullish divergence to form. For the divergence to correct, Bitcoin’s price will eventually need to rise, which could cause the crypto to break bullishly from the triangle.
On Aug. 17, Bitcoin dropped under the 200-day simple moving average (SMA) and was unable to regain the area on Aug. 29 and Aug. 30.
If Bitcoin continues to trade below the 200-day SMA, the 50-day SMA will cross under the 200-day, which will cause a death cross to form.
Bitcoin has resistance above at $27,133 and at $28,690 and support below at $25,772 and at $24,206.
The Ethereum and Dogecoin Charts: Ethereum and Dogecoin are trading in symmetrical triangle patterns, forming a series of lower highs and higher lows. The two cryptocurrencies are set to meet the apex of the triangles on Sept. 13 and Sept. 12, respectively, indicating a larger move to the upside or downside is likely to come before those dates.
If Ethereum and Dogecoin continue to trade sideways or break up or down from the triangle on lower-than-average volume, the pattern will be negated and technical traders can watch for subsequent patterns to form. The cryptos have been trading on decreasing volume, indicating a surge in volume could be on the horizon, which will allow traders to gauge the future direction.
Ethereum has resistance above at $1,717 and at $1,825 and support below at $1,615 and at $1,564.
Dogecoin has resistance above at $0.065 and at $0.069 and support below at $0.061 and at $0.057.
Read Next: Coinbase’s Investment Arm Finances Six Onchain Projects, Promotes Innovation
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