Almost every single cryptocurrency I look at has a hidden bearish divergence on their respective daily charts. A hidden bearish divergence is a condition where the price makes lower highs but an oscillator like the RSI or the Composite Index makes higher highs. A hidden bearish divergence warns of a continuation of the bearish price move – however, it is only relevant if the previous trend was bearish. For most cryptocurrencies, the short-term daily trend was down.
Above: Cardano (ADAUSD) chart
Cardano (ADA) remains under great pressure as it approaches the daily Kijun-Sen. Since June 18, there has been intense selling pressure when Cardano moves to Kijun-Sen. The blue arrows on the chart correspond to the same time period as the blue arrows in the RSI below. Cardano has made lower highs while the RSI has made higher highs – hidden bearish divergence. This divergence also occurs when the RSI begins to test the 50 and 55 levels. 55 is the first overbought level in the RSI when an instrument is in a downtrend. The RSI itself has printed a rising wedge – a very, very bearish continuation pattern. I expect Cardano to drop to at least the 1.20 level. If 1.20 doesn’t hold up, a visit at 0.84-0.94 is next.
Above: Polygon (MATICUSD) chart
Like Cardano, Polygon (MATIC) exhibits a hidden retrograde divergence. There is massive resistance for polygons above the 1.3755 level. 1.3755 contains the daily Kijun-Sen, three trend lines and the 38.2% Fibonacci retracement. Polygon finding weakness against this resistance is typical, and for anyone who is bearish the setup is very tempting. There doesn’t seem to be much momentum to continue the upward thrust for Polygon so I would expect a downward move and test the 61.8% Fibonacci retracement and the high volume node at $ 0.85. Below $ 0.85, there’s a massive volume dessert in the volume profile – there’s almost no support to keep Polygon from hitting the middle $ 0.40 if it’s not held at $ 0.80.
Above: Litecoin (LTCUSD) chart
Litecoin (LTC) current Ichimoku chart shows almost the same bearish continuation setup as Cardano and Polygon. The blue arrows on the chart and the composite index show where the hidden bearish divergence is. Now I could see Litecoin moving over the daily Kijun-Sen to test the VPOC (Volume Point of Control) 2021 at 175 before facing lower pressures. Litecoin’s RSI had encountered constant resistance at the 50 level, so it should come as no surprise that the weakness moved on Wednesday, Thursday and Friday.
The current Ichimoku charts are declining across all three of the above cryptocurrencies. I will continue to be a short-term bear as long as the price stays below the cloud and the Chikou Span stays below the candles. The only time I transition to a full bullish stance is when the price is trading above the cloud and the chikou span above the candles.
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