What is next for Bitcoin?
Looking at the Bitcoin quotes, we notice that the exchange rate of the oldest virtual currency has been in the horizontal trend for four weeks between the technical support of $28,500 and the resistance in the region of $32,000.
Even though we observed quite a clear upward rebound at the beginning of the new week, in practice, it does not change anything at all — no key level of resistance was broken.
From a technical point of view, Bitcoin continues to consolidate, which is a form of correction after previous declines. Due to this fact, the potential for short-term increases remains quite limited. Bitcoin may limit its appreciation to a region of technical resistance of $32,000. In practice, only a permanent break above this level could open the door to higher gains in the area of $34,500 or even $36,900.
While the market stays inside the consolidation, the breakout is statistically more likely to be low, which would mean a further decline to around $24,000 or even further toward $20,000.
Looking at the Ethereum quotes, we notice that the price of this cryptocurrency has been moving inside a parallel downward channel for nearly four weeks. Although the recent sell-off has already halted around the horizontal support of $1720 and therefore did not re-test the bottom-end of the pattern, increases since last Saturday could soon re-test the downward trend line at the top of the set.
However, suppose supply pressure reappears around this resistance. This barrier could be rejected again, naturally supporting a fallback to $1720 or even further to $1600, where the channel’s lower boundary trend line runs.
Looking at the Litecoin quotes, the price of this cryptocurrency fell between 30 March and 12 May 2022 by over 61%, increasing ongoing depreciation to almost 83%. In turn, counting from the historic peaks in May 2021, the LTC price has dropped by over 87%.
Such a significant sale meant that on 12 May this year, LTC costs only $52, which was the lowest price level since November 2020.
The demand reaction that appeared around this support turned out to be very small concerning the dynamics of the previous downward movement. The consolidation observed for almost four weeks may be only another temporary correction in the downward trend. The LTC rate will return downward, slipping towards $50 or even $39.
Nevertheless, in the context of the short-term outlook, there are some indications of a potential for slight increases. The rebound observed on Monday morning led to the defeat of local resistance in $64,50. This fact means that soon we could expect a continuation of this trend towards $69,50, or even further towards $74.
We could also expect a short-term continuation of Avalanche (AVAX) trading gains. The exchange rate of this cryptocurrency broke on Monday morning above the downward trend line, which is the upper limit of the downward channel, which may naturally drive a further increase towards the next resistance. This one, however, is very close, already in the vicinity of $28,50.
The nearest resistance has been tested recently, from the top (as a support) and the bottom (as a resistance). Moreover, this level coincides with the so-called The Golden Ratio, i.e. measuring 61.8% Fibonacci retracements from the earlier downward move, which may determine the emergence of more significant supply pressure in his area, which in turn could drive further declines.
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