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Last week, cryptocurrencies plunged following news of the Chinese crackdown. Though the fall was sharp, it was short lived. Lower levels gave an opportunity to the eager bulls to make an entry.
So, has the correction ended and will digital currencies again resume their gravity-defying run? Should you jump in right away or will the cryptocurrencies retest last week’s lows?
Let’s look at the charts and find out.BTC/USD
We expected Bitcoin to pullback to about $3200 levels, but it never dipped below $3500.05. This shows that there is enough buying support at lower levels.
Nevertheless, after the pullback of the past four days, the digital currency has reached the 50 percent Fibonacci retracement level of the fall from $4975 to $2974, which should act as a resistance. Additionally, Bitcoin is likely to face resistance between the $3955 and $4100 levels, from both the moving averages and the downtrend line. We don’t expect the digital currency to climb back to its lifetime highs in a hurry.
We expect some kind of a consolidation or a minor pullback towards the recent lows once again. However, if the price continues to rally and breaks out of both the moving averages and the downtrend line, we will throw in the towel and quit looking for a pullback.ETH/USD
Ethereum never pulled back to our buy levels of $220. The lowest it fell to was $238.98 levels yesterday. The digital currency has broken out of the descending channel, which is a positive sign.
Currently, Ethereum has reached close to the 50 percent Fibonacci retracement levels of the fall from $409.42 to $200.15, which should offer stiff resistance. Additionally, we expect the digital currency to ...