Price behavior analysis, short to intermediate-term trade set-ups. The theme remains a bearish one in the cryptocurrency space despite the relentless selling pressure we’ve seen so far this year. They don’t appear oversold yet.

Bitcoin and Ripple are both posting triangle patterns within the context of the downward slide, increasing the likelihood we see more selling just ahead. Ethereum is hanging out towards the high end of a maturing range, making it a point of interest for shorts from a risk/reward perspective.

See how positioning changes in cryptocurrencies and other markets can help as a tool to determine price direction on the IG Client Sentiment page. Short-term price swings in Bitcoin and Ripple have been growing increasingly smaller, and as a result symmetrical triangles are building on the 4-hr time-frame.

The nature of these triangles is as such – they don’t in of themselves forecast which direction the market is about to head, just that contraction in volatility is nearing its end. However, when a solid trend is in place – in this case lower – the likelihood of a downside break is elevated.

If indeed we see a break along the path of least resistance often times it leads to a smoother trade than if they break out against the primary trend. The key is waiting for the break, because there is still risk of an upside breakout – waiting for confirmation is prudent. Read more from…

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