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Bitcoin, Ethereum, and Ripple dead cat bounces

  • Cryptocurrencies are recovering after a lost weekend that saw new lows.  
  • Ohio’s approval of Bitcoin for some taxes is a central driver of the recovery.
  • The charts still show the trend is down with digital coins out of oversold territory.

The “lost week” saw a  Bitcoin  hitting $3,456, Ethereum dip below $100, and  Ripple  not looking resilient. The downfall was an extension of the November 14th sell-off that sent BTC/USD below $5,000, and the November 19th plunge that sent it below $5,000. The Black Friday weekend was quite dark for cryptos.

However, all digital currencies are enjoying a recovery. Ohio will accept Bitcoin as a payment for no less than 23 types of business taxes from today, November 26th, also known as Cyber Monday. Ohio is the first US states to do so and one of the first local governments in the world to move forward.

Critics of cryptos state that the inability to pay taxes, enforceable by governments, undermines their prices. The step by the Mid-Western state is a significant step forward. Ohio’s Treasury explains the choice of the granddaddy of cryptocurrencies:

Cryptocurrencies cannot be transferred to third parties without user initiation, thereby practically eliminating fraud; Anyone can view all transactions on the blockchain network; Payments on the blockchain can be tracked on a second-by-second basis; a minimal fee is charged to confirm transactions on the blockchain network

However, looking at the technical charts, the picture remains quite gloomy and perhaps provides an opportunity to take profits, go short, or just sell before prices plunge to lower levels.

BTC/USD Technical Analysis – just another dead cat bounce?

BTC USD Cyber Monday 2018 technical analysis chart

Examing the Relative Strength Index (RSI) on the four-hour  chart, we see the that bounced above 30. The drop below that level indicated oversold conditions, from where the bounce came. Yet after this bounce, the current level of around 37 indicates  BTC/USD  could resume its falls. Momentum remains  to the downside, despite the recovery.

Support awaits at $3,647 which was a stepping stone to the recovery. The fresh 14-month low at $3,456 is critical. A loss the weekend trough opens the door to $3,000.

Looking up, $4,000 is a significant psychological level but real resistance is at $4,124 which capped the digital coin in its recovery attempt. The pre-crash peak of $4,595 is next.

XRP/USD Technical Analysis – Looking better, but not by much

Ripple Cyber Monday November 26 2018

The current crypto-crisis sent Ripple to second place, this time leaving Ethereum far behind. During most of the time, the digital coin used for transactions stood out in its resilience, but not for too long. It also suffered and fell. The technical picture looks better than Bitcoin’s and it is only at a two-month low. However, it does not stand out.

Also here, the RSI is out of oversold conditions  and stands at around 43 at the time of writing, somewhat better than Bitcoin. Yet also with Ripple, Momentum remains to the downside.

Ripple has a bit more hope if it surges back above 43, topping the 50 Simple Moving average (SMA). However, it first needs to overcome $0.3944 which served as support before the fall and then turned into resistance. Further above, the former support line of $0.4240 awaits. Above $0.43, we note $0.4660 as another line of resistance after preventing a recovery attempt last week.

Looking down, $0.3650 is immediate support, followed by the cycle low of $0.3250. Below $0.30, we see $0.2690.

ETH/USD Technical Analysis

Ethereum gas Cyber Monday November 26 2018

Ethereum, used in so many Initial Coin Offerings (ICO’s) is on the back foot. Also here, there are some signs of life, but it is probably the weakest of them all. The Relative Strength Index is at 38 and Momentum is still significantly to the downside.

$113 is the first level on the downside after supporting  ETH/USD  in recent hours. Further down, $106.50 was a swing low and is a weak line of support. $100.97 was the trough over the weekend.

Looking up, the round number of $120 capped  Ethereum  earlier in the day and is immediate resistance. $128.25 served as resistance on Saturday, after the leg down earlier. $140 was the top level on Friday.

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.