Price behavior analysis, short to intermediate-term trade set-ups. See how traders are positioned in Cryptocurrencies and what it might mean on the IG Client Sentiment page. Selling in the cryptocurrency market has been extremely heavy, an expectation we thought could be the next step when the character in price action began changing last month – that is, initial declines off the highs were not piquing the interest of buyers as they once did on prior declines over the past 1-3 years.

With that said, though, rallies may soon commence with new support levels arriving amid oversold conditions. (A sentiment my colleague Nick Cawley also expresses.) Since breaking a wedge back on Jan 30, the precipitous decline in Bitcoin has broken support levels we had penciled in at 9222 and 7888.

This brings us to the next level on our radar at 5555. Given how sharp the decline has been in recent sessions, and off the high near 20k, a big bounce may soon be in store.

That bounce may commence from around the 5555-level. Ethereum was the hold-out of the group, initially, before finally succumbing to heavy selling the past few sessions.

The 770 spike-day low from last month held with precision on 2/2 and 2/4 before breaking yesterday. The December spike-day low at 493 is now in the cross-hairs, which at this time is in confluence with the 200-day MA (would be the first test in a year). Read more from dailyfx.com…

thumbnail courtesy of dailyfx.com