It’s telling that the major cryptocurrencies have failed to sustain a rally as a major geopolitical event unfolds. Those who’ve told us that the cryptos would make a great hedge against this kind of uncertainty are clearly mistaken. At least gold and silver blasted upward on the invasion news if only for a few hours.
The price charts tell the story for bitcoin and ethereum: both are trading within striking distance of their most recent lows. From the viewpoint of classic price chart analysis, it’s important for those long that these levels hold. A drop below is likely to trigger the kind of dumping that gets attention.
Here’s the daily for an up close view of Bitcoin:
It’s that late January low down there near 34,000 that must hold. On the positive side, you can see how buyers have swooped in twice at or near that price — those are the big dark volume bars along the bottom of the price chart.
It’s unfortunate for those long, however, that Bitcoin continues to trade below both the 50-day moving average (the blue line) and the 200-day moving average (the red line). This is very unlike the old days when the crypto seemed to stay above both, no matter what. Those days are over, at least for now.
The Bitcoin weekly price chart looks like this:
If it breaks below that 34,000/33,000 level, then Bitcoin could find support at the June/July, 2021 lows near 28,000. If the crypto were to drop below that level, it would not be a good situation for anyone still in love with the thing.
Note that the momentum indicators are diverging negatively from price on this weekly look: the relative strength indicator (RSI, above the chart) and moving average convergence/divergence indicator (MACD, below the chart). Take a look at how the 50-week moving average (the blue line) is now trending downward after months and months of just upward.
The daily price chart for Ethereum looks like this now:
A drop below the late January low of just under 2200 would be a problem. For the bulls, the volume of buying last week was substantial as the price dipped toward that low — but then dried up as it attempted to move higher.
In the meantime, Ethereum’s price remains below a down trending 50-day moving average — and well below the 200-day moving average which appears to be flattening after a steady upward look.
Here’s the weekly Ethereum price chart:
So if it breaks below the 2250 level, the next support level (where previous buying showed up) would be down there near 1750, the June/July 2021 lows. You can see the negative divergences between the price and the momentum indicators (the RSI, above the price chart and the MACD, below it).
The XRP daily price chart is here:
As it’s closed above the 50-day moving average, slightly, you could say that XRP is a bit stronger than Bitcoin and Ethereum here. The point is: no big rally on the geopolitical news for this crypto either. A drop below the late January lows near 55 would be concerning for the volatile “Ripple.”
The weekly price chart for XRP looks like this:
You would have to be in love with volatility to even consider a cryptocurrency that moves like this: from about 1.90 in April, 2021 down to about 50 cents by June, July, 2021. Now trading below its 50-week moving average, is the next move a sell-off toward the 200-week moving average at .49?
We will find out.
Not investment advice. For information purposes only.
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