Cryptocurrencies turned bearish earlier this month, after being quite bullish for more than a month in August. It seemed like the bearish times had come to an end after the major crash in May, which lasted until late July, but the bearish momentum resumed again in September, as the crackdown on cryptos accelerated. Litecoin is looking extensively bearish while Ethereum, which was showing great signs of demand until early September, has turned down as well, and now it seems to be stuck, so let’s have a look at these two cryptos.
Ethereum Analysis – ETH/USD Bouncing Between MAs
As already mentioned, Ethereum was looking quite bullish from late July until early September. Ethereum appreciated around 250% during that period, while Bitcoin didn’t even double in price during the same period. The London Hard Fork or Ethereum 2.0 upgrade, which was launched recently, helped improve the sentiment further, along with the demand for both the Ethereum network and the coin, which pushed ETH/USD above $4,000.
ETH/USD
But, the second crash in the crypto market came in the second week of September, and the second leg of this bearish move came last week. Ethereum broke below the 20 SMA (gray) on the first decline and fell below the 50 SMA (yellow) on the second decline last week.
Now, the 50 SMA has turned into resistance for Ethereum at the top, with the 20 SMA adding further strength now, after catching up. The 100 daily SMA (green) has turned into support at the bottom, and Ethereum has bounced between these MAs a few times now. Buyers surely want to get going, but the bearish sentiment in the market is holding them for the moment. Nonetheless, I think that buying at the 100 SMA at around $2,750 is a good trade idea, with a stop below the 200 SMA (purple).
Ethereum Analysis – ETH/USD Bouncing Between MAs
Litecoin trading below $150
Litecoin on the other hand, has been looking quite weak, as we mentioned in the 2021 Litecoin forecast, and it hasn’t shown much stamina that could have driven it higher. We saw a jump in early September, which took the price above the 200 SMA, but the crash in the market brought it down again. We saw another spike when GlobeNewsWire announced that Walmart was going to accept Litecoin, which of course was not true. The price has fallen below all moving averages on this chart, and they have turned into resistance, showing increased weakness, but the decline has stalled around $150.
The 50 SMA (yellow) has been the reason for the stop in this area on the weekly chart. It has been acting as support for LTC/USD, and now the 20 SMA is also adding further strength on this timeframe chart. If these moving averages get broken, the other two MAs will offer a good place to buy Litecoin at around $100, which was the July low.
