Bitcoin BTC/USD started a sharp decline Tuesday at 1:00 p.m Dogecoins DOGE/USD followed suit.
On Friday, Benzinga exclaimed that Tuesday is likely to see a bullish or bearish breakout as Bitcoin nears the apex of a symmetrical triangle pattern that consolidated the top crypto over the Labor Day long weekend.
After the triangle collapse, Bitcoin plunged nearly 4%, Dogecoin plunged nearly 5%, while Bitcoin plunged nearly 5% ether ETH/USD held up relatively stronger, slipping about 1% lower.
A bearish day in broader markets didn’t help the situation as the S&P 500 showed early signs of indecisiveness before beginning to fall about 0.6%.
The bearish action in the stock market and crypto sector was likely a disappointment to many retail traders who were hoping that the start of the fall trading period could bring plenty of money back to their trading desks for a bullish end to the third quarter.
Below is a look at the three crypto charts.
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The Bitcoin chart: Bitcoin began trading in a symmetrical triangle pattern on August 28, creating a series of lower highs and higher lows as volatility decreased and the daily trading range tightened. The collapse of the triangle has sent the crypto into a fresh downtrend, with the recent lower high being formed at $20,060 on Monday and a new low on Tuesday.
- The collapse of the pattern also caused bitcoin to fall below the key psychological support level of $20,000. The area can now act as a strong resistance unless the bulls are able to come in and support Bitcoin again in a short time.
- If Bitcoin closes the trading day near its daily low, the crypto will print a bearish engulfing candlestick, which could indicate lower prices to come again during Wednesday’s 24-hour trading period.
- If the crypto bounces higher to close the period with a lower wick, Bitcoin will print a hammer candlestick, which could indicate a bounce is in the cards, making another lower high the most likely scenario.
- Bitcoin has resistance at the top at $19,915 and $21,213 and support at the bottom at $17,580 and $16,000.
The Ethereum chart: The wedge which Benzinga called out on Ethereum on Friday widened over the weekend and on Tuesday the crypto tested the lower ascending trend line of the newly drawn pattern, holding the area as support. The relative strength could be due to Ethereum’s upcoming merger date.
- Ethereum is trading in an uptrend within the pattern, with the recent higher high formed during Tuesday’s 24-hour trading session at $1,686.82 and the recent higher low at $1,534.54 on September 3rd.
- If Ethereum ends the trading day near its daily low, the crypto will print a shooting star candle that could portend lower prices and a wedge collapse is on the cards.
- If the crypto is able to bounce up and close the 24-hour session flat or near the daily high, Ethereum could continue trending higher within the wedge for an extended period.
- Ethereum has resistance at the top at $1,717.41 and $1,957.24 and support at the bottom at $1,421.80 and $1,245.
The Dogecoin chart: Dogecoin broke from a sideways trading pattern on above-average volume on Tuesday, suggesting that the bears may have taken control. As of Tuesday afternoon, Dogecoin’s volume on Coinbase was around 227,000 compared to the 10-day moving average of 195,444.
- The drop to the downside negated a slight uptrend the crypto had settled into inside the horizontal pattern. Dogecoin also lost a key support level at 6 cents and bullish traders will want to see Dogecoin close the 24-hour session above this level for more confidence in the future.
The eight-day and 21-day exponential moving averages (EMAs) on Dogecoin’s chart have started curling lower, which could indicate that the two EMAs will continue to guide the crypto lower. Bullish traders will want to regain the 8-day EMA as support, which briefly happened Tuesday morning before the cryptocurrency rejected the $0.065 level.
- Dogecoin has resistance above $0.06 and $0.065 and support below $0.057 and 5 cents.
See Also: Bitcoin ($BTC), Dogecoin ($DOGE), Ethereum ($ETH), Tesla Motors (TSLA) – Do you think Bitcoin will end below $15,000, Ethereum below $1,000 and Dogecoin below 5 cents? September?
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