Bitcoin BTC/USD It slipped more than 4% after the Federal Reserve Chairman on Friday Jerome Powell during which the markets were thrown into chaos annual speech In Jackson Hole Symposium.
Ethereum ETH/USD It was the hardest hit, falling more than 8% dogecoin DOGE/USD it fell somewhat modestly in tandem with Bitcoin, down about 5%.
A bearish reaction to Powell’s hawkish tone caused the three cryptos to fall below Benzinga’s bearish flag patterns. shown on Wednesday.
A bearish flag pattern is created by a steep drop that lowers the pole, followed by a consolidation pattern between a channel with parallel lines that brings the stock higher or a pulling triangle pattern.
For bullish traders, the “trend is your friend” (until it isn’t) and stocks may continue to move higher in the channel below for a short period of time. Aggressive traders may decide to buy the stock at the lower trendline and exit the trade at the higher trendline.
- Bear traders will want to watch for a breakout on high volume from the downtrend line of the flag formation for entry. When a stock breaks out of a bearish flag pattern, the measured down move is equal to the length of the pole and must be added to the highest price within the flag.
- A bear flag is canceled when a stock closes the trading day above the upper trend line of the flag pattern or when the flag rises above more than 50% of the length of the pole.
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Bitcoin Chart: Bitcoin’s bearish flag pattern developed between the months of August. 15 and Thursday, a bearish pole formed during the first five days of that time frame, and a flag was printed on the following days. The measured movement of the pattern is around 17%, which suggests that the cryptocurrency may fall to $18,100.
- Friday’s sharp decline also rejected an uptrend in which Bitcoin was trading within a flag formation. For Bitcoin to confirm a new downtrend is on the cards, the cryptocurrency will need to rally to print a high below $21,925.
- Move the bottom camera at a higher-than-average volume, which indicates that the bears are both interested and in control. At press time, Bitcoin volume was around 29.5 million on Coinbase, compared to a 10-day average of 23.78 million.
- Bitcoin will print a bearish Marubozu candlestick if the cryptocurrency closes the 24-hour trading session near the low of the day, which could indicate that the lows will come again on Saturday. If the cryptocurrency bounces to form a low wick, it could be lower and the cryptocurrency could trade higher over the weekend.
- Bitcoin has resistance above $21,313 and $23,729, with support below at $19,915 and $18,775.
Ethereum Chart: Like Bitcoin, Ethereum broke out of a bearish flag pattern that was created around the same time frame as the Bitcoin flag. The measured move for Ethereum is 25%, which suggests that the cryptocurrency could fall to $1,290.
- Unlike Bitcoin, Ethereum has yet to deny its uptrend. If the cryptocurrency falls below the recent high low printed in August. 22 $ 1,520, the uptrend will officially end and a downtrend may occur.
- Ethereum is showing resistance above at $1,717.14 and $1,957.44 and support below at $1,421.80 and $1,245.
Dogecoin Chart: Dogecoin’s breakout from the bearish flag is less convincing, as the cryptocurrency’s volume is measured below average, indicating bearish weakness.
At the time of writing, Dogecoin’s volume on Coinbase was around 307.2 million, compared to a 10-day average of 323.83 million.
- Below-average volume hindered the move lower, and while Dogecoin has somewhat negated the uptrend, the sideways pattern in which the cryptocurrency is trading within a flag formation is still intact.
- Dogecoin has resistance above $0.075 and $0.083, with support below at $0.065 and $0.057.
See also: What’s happening in the world with Bitcoin, Ethereum and Dogecoin dropping on Friday?
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