Crypto Index analysis: Correction time
07:40, 13 August 2020
The Crypto Index may start to correct lower this week, as the recent breakout rally towards the 67,000 level starts to lose momentum.
Crypto Index analysis shows that the index could start to correct back towards the 50,000 support area if bulls fail to make a new higher monthly high.
Crypto Index medium-term price trend
The Crypto Index may have formed an interim high, as Bitcoin and a host of top altcoins look set to correct lower.
Bitcoin has the potential to correct back towards the $10,000 support area, which could heavily affect the Crypto Index.
Crypto Index technical analysis over the medium term shows that the index is trapped inside a large ascending broadening wedge pattern.
The daily time shows that the ascending broadening wedge is located between the 45,000 and 75,000 levels.
Traders should note that due to the ongoing strength in the index a medium-term rally towards the 75,000 level appears the most likely outcome.
However, a corrective drop back towards the 60,000 to 55,000 area cannot be discounted before the next rally commences.
Traders should note that the Crypto Index’s 30-day moving average offers significant support, around the 50,000 level.
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Crypto Index short-term price trend
Crypto Index analysis highlights that the index has a bullish short-term trading bias while the price trades above the 60,000 level.
The four-hour time frame shows that the index is currently trapped within a symmetrical triangle pattern.
According to the size of the neutral price pattern, the Crypto Index could stage a 10,000 point directional move once a breakout from the triangle takes place.
Bearish MACD price divergence on the lower time frames is also warning that the index could see a significant drop towards the 55,000 area.
Crypto Index technical summary
Crypto Index technical analysis indicates that a correctional drop may be about to occur. Watch out for strong buying if a bearish correction does take place.