Litecoin and EOS are leading the way in the cryptocurrency market today with both recording significant increases over the past 24 hours.
Data from Messari show Litecoin increasing 4.09% and EOS increasing 3.81%.
However, both are starting to pull back from earlier highs formed today and are forming chart patterns that may indicate further falling.
Litecoin managed to overcome a key resistance level at $48.31 in earlier trading today.
This was the point of a price breakdown in November and price tested the level multiple times before finally breaking above.
Litecoin is now forming a bearish divergence between the price and RSI.
A bearish divergence is where the price goes on to form higher highs despite the RSI forming lower highs.
It shows price continuing to increase despite falling buying pressure.
If price can return to increasing, the next key level to monitor is $57.49 which was the point of a breakdown in October.
A price drop from here will likely meet support at $48.31.
The previous 4-hour candle closed as a Doji candle.
A Doji candle is a candle where the open and the close are around the same point and typically reflects uncertainty from traders.
Price has strong buyer momentum despite the bearish divergence forming, so traders are likely decided on whether to be taking long or short positions.
Since passing a key weekly level on Monday, EOS has continued to outperform.
It is the top performer over the past seven days with data from Messari showing it increase 31.28% over this time period.
Despite a pullback yesterday from highs, price surged past yesterdays high today showing traders willing to accept higher valuations.
Price consolidated after the pullback yesterday and price may meet some support in the consolidation area if the price drops from here.
EOS has also been forming a bearish divergence pattern on the shorter hourly timeframe today indicating the downward movements may be in store.
Price has already started to pull back, but buyer momentum remains strong with MACD increasing.
- Litecoin and EOS both outperform market leader but both form bearish divergences, a bearish trend reversal pattern.
- Litecoin surpassed a key level at $48.31 today which it had tested several times. If the price drops, it will likely meet support at this point. If the price continues to increase, it will likely meet resistance at $57.49.
- EOS is the top performer over the past seven days after passing a key resistance level on Monday.
- A price drop for EOS may find some support in the area where price consolidated yesterday.
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