Crypto index analysis: coming under pressure
12:36, 4 September 2020
The Crypto index is trading at a critical juncture, following a strong bearish reversal from the 67,000 level earlier this week
Crypto index analysis shows that a bearish head and shoulders pattern is warning of more losses ahead.
Crypto index medium-term price trend
The Crypto index has incurred heavy losses following a major technical correction in a number of top coins.
Due to the large size of Bitcoin and Ethereum’s market cap, the drops in both coins have weighed heavily on the value of the Crypto index.
Crypto index technical analysis over the medium term shows that an ascending triangle pattern has been activated to the downside.
The overall size of the triangle pattern is projecting an eventual decline towards the 40,000 level.
Traders should note that technical pressure will remain on the index while the price trades below the 67,000 level.
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Crypto index short-term price trend
Crypto index analysis highlights that the index has a bearish short-term trading bias while the price trades under the 57,000 level.
The one-hour time frame shows that a bullish inverted head and shoulders pattern may be in the process of forming following the recent reversals from the 68,500 and 67,000 levels.
According to the size of the bullish price pattern, the crypto index could rally towards the 82,000 level if a recovery can begin from current levels.
In the short-term buyers need to anchor the price above the 57,000 level to stop the pattern being invalidated. A sustained decline under the 57,000 level could cause the index to crash below the 50,000 level.
Crypto index technical summary
Crypto index technical analysis highlights that bulls need to hold the price above the 57,000 support level to regain upside pressure.