Ethereum (ETH) and Litecoin LTC: Drag of the Dogs

January 3, 2019 / by Bill Noble

Currently, Ethereum (ETH) is near resistance in the $162 — $167 zone. $167 is horizontal resistance (Figure 1).  $162 is diagonal resistance from Fibonacci speed lines (Figure 2).

Support in Ethereum (ETH) is at the 38 percent retracement of the most recent leg up at $151. Bigger support would be at 76 percent of the recent decline at $139.

Moving averages in Ethereum (ETH) are worth looking at. Currently, Ethereum is $100 away from its 200-day moving average (Figure 1). Markets can do something called “mean reversion.” In this case, there could be a further up move to the long-term average — even if the move is only corrective in nature.

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Also, looking at the daily chart of Ethereum (ETH), the 50-day moving average in Ethereum (red line) is starting to cross above the 21-day moving average (blue line) on the ETH daily chart (Figure 2). After a correction to relieve the tactical overbought conditions, this could be a constructive development. It is not uncommon to see a correction lower right as the moving averages cross. So, barring a disaster, today’s decline is not a disaster as of the publishing on this report.

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In Litecoin (LTC), $32 is major support (Figure 3). If that level holds, then perhaps you can talk about more upside.

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Bottom Line: if moving averages prove useful in predicting Ethereum (ETH) direction, it could be a sign that asset managers are applying traditional algorithms to accumulate. Dogs like Ethereum (ETH) and Litecoin (LTC) that are below Bitcoin (BTC) on the market cap chart have to hold support. If that doesn’t happen, Ethereum (ETH) has the power to take down Bitcoin (BTC).

The Crypto.IQ trading desk is working on both long and short positions to best take advantage of these support and resistance levels. One thing I most admire about our desk is their ability to navigate the market without bias. Join me as I continue my crypto education.