Cryptocurrencies extend their decline from recent highs

There were a few signals traders could have spotted ahead of the ongoing selloff.

After last Friday's warning from Bitcoin, with an all-time high leading to a direct retracement, the crypto market has started to make its way off its most recent highs.

Ethereum staged a huge rally toward its record levels, but buyers failed to break through the $4,870 all-time high—a sign of hesitancy from the market that sellers enjoy.

Altcoins were also a bit timid on the last leg of the rally showing some lack of depth in buying.

And with cryptocurrencies still firmly in the risk-asset camp, renewed geopolitical headwinds (including uncertainty with the Russia-Ukraine war) are giving investors further reasons to cash out from the rallies.

Let's see through BTC and ETH intraday charts if this should keep on going or if this is just a small retracement in the longer-term trend.

A follow-up from our most recent crypto piece: Imminent profit-taking in Cryptocurrencies – What's the story

Read More: Gold (XAU/USD) Hovers at $3350/oz, Russia-Ukraine Developments in Focus

Bitcoin is $9,000 (7.20%) from its most recent ATH at $124,269, with the shape of the most recent highs appearing as a double top.

Despite this warning sign, the ongoing 8H candle is showing a doji-indecision as shorter timeframes enter oversold territory.

The current candle appears as dip buyers try to re-enter at the upward trendline that has served as support since the end of April.

Prices are located right between the 50 and 200-period MAs – showing that the action is much less balanced than the previous uptrend.

Levels to watch for Bitcoin trading:

Levels for BTC trading:

Support Levels:

• $114,500 to $115,500 rebound at the current supporting trendline
• $110,000 to $112,000 previous ATH support zone (MA 200 at $111,350)
• $100,000 Main support at psychological level

Resistance Levels:

• $116,000 to $117,000 Pivot
• 50-period MA $117,330
• Major Resistance $122,000 to $124,500
• Current all-time high $124,596

Ethereum's outlook doesn't look as bleak, with the ongoing retracement hanging around the $4,200 to $4,300 consolidation zone (yellow box).

With prices evolving in a current upward channel, sellers seem to have appeared at the higher bound just before the $4,870 2021 record.

Buyers took the current rally to $4,790. As mentioned in the intro, a failure to breach the past highs is interpreted by sellers as lack of persistence from ETH bulls.

Nonetheless, after reaching ultra-overbought levels, such retracements are healthy.

Probability of a higher rebound from here are still decent as long as prices hold above the $4,000 pivot, and even higher probability if buyers take the short-term hand here.

Levels for ETH trading:

Support Levels:

• $3,500 Support zone
• $4,000 Main pivot (confluence with 50-period MA)
• $4,200 to $4,300 consolidation zone (currently testing)

Resistance Levels:

• Current highs $4,793
• $4,700 to $4,900 All-time high resistance zone
• $4,870 2021 record
• Potential resistance at 1.618% Fibonacci extension of April to July up-move

The Total Crypto Market Cap is testing the 2024 highs.

As long as profit-taking doesn't go below 3.50T, we can assume that this is just some healthy retracement instead of the beginning of a bear trend.

Altcoins are retracing a bit more strongly, but this is common as they are the most risky of the already-risky crypto asset class.

We will stay in touch frequently to see how this story develops.

Safe Trades!