Technical Analysis June 7: Bitcoin, Ethereum, Bitcoin Cash, Litecoin and Ripple

Technical Analysis June 7: Bitcoin, Ethereum, Bitcoin Cash, Litecoin and Ripple

The cryptocurrency markets continued last week’s comeback and gained $14 billion in market cap. Last week, we saw many cryptocurrencies below the Ichimoku cloud and between major support and resistance levels. Let’s see where the top cryptocurrencies are at this week using technical analysis.

Disclaimer: This article is not meant to constitute trading/investment advice. Please use extreme caution when trading any cryptocurrency.

For this article, we will be using a handful of terminology that non-technical traders may not be familiar with. These terms are at the end of this article under “Glossary.” If you would like to read those terms now, click here.

Bitcoin, currently ranked #1 by market cap, is up 1.2% over the past 24 hours. BTC has a market cap of $131.84B with a 24 hour volume of $4.92B.

Chart by CryptoCompare

Bitcoin is up 1.2% over the past 24 hours.

Bitcoin is currently sitting at $7,713 after starting the week at $7,350. Bitcoin looks to be testing the next resistance level at $8,000. The descending volume hints at indecision and/or low supply.

Bitcoin Technical Analysis
Volume trending downward.

Using the Ichimoku Cloud indicator, we see that Bitcoin is under the cloud and coming off a retest of the Tenkan-Sen. The Kijun-Sen is sloping hard indicating high momentum and looks to be forming a TK-Cross below the cloud. A TK Cross below the cloud is extremely bearish so if it forms expect more downside.

Bitcoin Technical Analysis
RSI looks relatively normal.

CarpeNoctom, a well-known cryptocurrency trader has two interpretations for Bitcoin over the next few months.

Ethereum, currently ranked #2 by market cap, is up 0.42% over the past 24 hours. ETH has a market cap of $60.97B with a 24 hour volume of $1.9B.

Chart by CryptoCompare

Ethereum is up 0.42% over the past 24 hours.

Last week, we noticed bullish divergence on the Ethereum chart. This week, Ethereum is up from $520 and is at $609. This is a ~15% increase foreshadowed by RSI. Ethereum has some solid support levels highlighted in green and has cloud resistance starting in the red area.

Ethereum Support
Ethereum between two key levels.

On the 1D chart, Ethereum has entered the cloud and is headed to test the Kijun-Sen. Ethereum blew right past the Tenkan-Sen, which is the faster-moving average.

Ethereum Technical Analysis
Ethereum failed the first attempt of breaking through the Kijun-Sen.

Ripple, currently ranked #3 by market cap, is up 1.53% over the past 24 hours. XRP has a market cap of $26.86B with a 24 hour volume of $277.15M.

Chart by CryptoCompare

Ripple is up 1.53% over the past 24 hours.

Lastly, Ripple saw an increase from $.55 to $.68. It’s testing the support level of $.70 again. There was news of a class action lawsuit involving Ripple being an unregistered security a month or so ago, but the case has been relatively quiet since.

XRP Support and Resistance
Ripple close to a resistance level.

Just like Bitcoin Cash, Ripple is retesting the cloud. Last week we pointed out that Ripple was forming a bearish cloud break, but with the lagging span about to break out near the price, no clear trend can be observed.

Ripple Technical Analysis
Ripple retesting the cloud.

Bitcoin Cash, currently ranked #4 by market cap, is up 1.4% over the past 24 hours. BCH has a market cap of $19.78B with a 24 hour volume of $649.33M.

Chart by CryptoCompare

Bitcoin Cash is up 1.4% over the past 24 hours.

Bitcoin Cash had a strong week increasing from $880 to $1152. Its resistance seems to be at $1220 and has support at $880.

Bitcoin Cash Support and Resistance
Bitcoin Cash headed towards the resistance level.

Bitcoin Cash is headed towards the bottom of a flat cloud. As stated in a previous analysis, flat parts of the clouds are often magnets, attracting the price. It is unlikely Bitcoin Cash definitively breaks through the cloud, but another retest of the bottom or Kijun-Sen is likely to happen.

Bullish Divergence spotted on the 1D.

Litecoin, currently ranked #6 by market cap, is up 0.73% over the past 24 hours. LTC has a market cap of $6.96B with a 24 hour volume of $351.82M.

Chart by CryptoCompare

Litecoin is up 0.73% over the past 24 hours.

Looking at Litecoin, we see that it recovered from the triple bottom and is sitting at $122. It is unclear which level Litecoin will test next, but it usually follows Bitcoin price movement.

Litecoin Technical Analysis
The fourth retest of support could lead to much more downside.

On the 1D chart, we see that Litecoin is also below the cloud, and touching the Tenkan-Sen. Momentum is relatively low indicated by the flat Tenkan-Sen and Kijun-Sen.

RSI is normal near the midpoint.

Conclusion

The global cryptocurrency market cap stands at $347.84B with a 24 hour volume of $15.78B. The Coinbase Index is currently sitting at 3695.19. Bitcoin dominance is currently at 37.9%.

This week, the big five cryptocurrencies are retesting prior resistance levels – a  change from last week when it looked like support levels were going to be repeatedly tested in a short time frame.

Following resistance retests, it will be interesting to see if resistance turns into support or if more downside is on the way.

There are no guarantees with technical analysis, this is simply an interpretation of the market using indicators. Technical analysis allows for more educated guesses, but a combination of technical analysis and fundamental analysis is the best approach.

To see some more cryptocurrency and trading-related content, follow Austin on Twitter.


Glossary

Here are the definitions for each of the technical analysis terms used in this article.

  • Senkou Span A – an indicator that is used to measure momentum, as well as future areas of support and resistance. Senkou Span A is always drawn in relation to Senkou Span B – together, they form the cloud.
  • Senkou Span B – forms the cloud along with Senkou Span A. Traditionally when Senkou Span B is located below Senkou Span A, it is a symbol of bullish price movement.
  • Senkou Span cross – The cloud is an area of uncertainty. Most traders do not make a move until price closes above or below the cloud – although, when the Senkou Spans cross one another, many traders use the indicator to predict the reversal of a current price trend.
  • Kumo Twist – The Ichimoku Cloud is a Japanese trading strategy, and ‘Kumo’ means cloud in Japanese. The Kumo Twist is just a nickname for a Senkou Span cross.
  • Tenkan-Sen – The Tenkan-Sen is used in conjunction with the Kijun-Sen to predict long and short positions. The formula for the Tenkan-Sen’s calculation takes the highest high and the lowest low and divides it by two over the last seven to eight time periods.
  • Kijun-Sen – Similarly to the Tenkan-Sen, the Kijun-Sen is calculated using the same formula, but it usually includes the last 22 time periods. The Tenkan-Sen highlights short-term price movement, while the Kijun-Sen gives a better idea of long-term price movement.
  • TK crossover – When the Tenkan-Sen crosses above the Kijun-Sen, it is an indication of bullish price movement. Conversely, the Tenkan-Sen crossing below the Kijun-Sen is a bearish sign. Both of these signals are known as a TK crossover. The location of the TK crossover impacts the strength of the signal. For example, a bullish TK crossover below the cloud is in bearish territory, and therefore a weak signal. On the other hand, a bullish TK crossover above the cloud is a strong signal.
  • Chikou Span – Otherwise known as the Lagging Span, Chikou Span shows where the price was 26 periods before the most recent closing price. An upwards Lagging Span above price shows bullish momentum, while a Lagging Span below price shows bearish momentum.
  • Volume – Is the amount of a stock, currency or asset exchanged in a given period of time. This can be expressed in terms of the unit (ex. Bitcoin) or standardized in terms of a currency such as dollars.
  • Momentum – Momentum measures the strength or rate of acceleration of price action.

Cover Photo by Brandi Redd on Unsplash

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Austin Tuwiner Author

Austin Tuwiner

Austin is an avid cryptocurrency investor studying computer science and software engineering at Towson University. His hobbies include researching cryptocurrencies, travel, and rock climbing. His goal is to help the average person understand and get into into cryptocurrency.

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