Bitcoin (CRYPTO: BTC) began a sharp decline at 1 p.m. Tuesday and Dogecoin (CRYPTO: DOGE) followed suit.
On Friday, Benzinga called out that a bullish or bearish break was likely to occur Tuesday because Bitcoin was nearing the apex of a symmetrical triangle pattern, which the apex crypto consolidated over the Labor Day long weekend.
After breaking down from the triangle, Bitcoin plunged almost 4%, Dogecoin plummeted almost 5%, while Ethereum (CRYPTO: ETH) was holding up relatively stronger, sliding about 1% lower.
A bearish day in the general markets didn’t help the situation, with the S&P 500 showing early signs of indecision before beginning to decline about 0.6%.
The bearish action in the stock market and the crypto sector likely came as a disappointment to many retail traders who hoped the onset of the fall trading period may bring big money back to their trading desks for a bullish finish to the third quarter.
Below is a look at the three crypto charts.
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The Bitcoin Chart: Bitcoin began trading in a symmetrical triangle pattern on Aug. 28, making a series of lower highs and higher lows as volatility decreased and the daily trading range tightened. The break down from the triangle has set the crypto into a new downtrend, with the most recent lower high formed on Monday at $20,060 and a new low formed on Tuesday.
- The break down from the pattern also caused Bitcoin to drop below the important $20,000 psychological support level. The area may now act as heavy resistance unless the bulls are able to come in and prop Bitcoin back up in short order.
- If Bitcoin closes the trading day near its low-of-day price, the crypto will print a bearish engulfing candlestick, which could indicate lower prices will come again during Wednesday’s 24-hour trading period.
- If the crypto bounces up to close the period with a lower wick, Bitcoin will print a hammer candlestick, which could indicate a bounce up is in the cards, which will make another lower high the most likely scenario.
- Bitcoin has resistance above at $19,915 and $21,213 and support below at $17,580 and $16,000.
- Ethereum is trading in an uptrend within the pattern, with the most recent higher high formed during Tuesday’s 24-hour trading session at $1,686.82 and the most recent higher low printed at the $1,534.54 mark on Sept. 3.
- If Ethereum ends the trading day near its low-of-day price, the crypto will print a shooting star candlestick, which could indicate lower prices and a break down from the wedge is on the horizon.
- If the crypto is able to bounce up and close the 24-hour session flat or near the high-of-day, Ethereum may continue to trend higher within the wedge for a longer period of time.
- Ethereum has resistance above at $1,717.41 and $1,957.24 and support below at $1,421.80 and $1,245.
- The drop lower negated a slightly uptrend the crypto had settled into within the horizontal pattern. Dogecoin also lost an important support level at 6 cents, and bullish traders will want to see Dogecoin close the 24-hour session above that level for more confidence going forward.
- Dogecoin has resistance above at $0.06 and $0.065 and support below at $0.057 and 5 cents.
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