A well-followed crypto strategist is issuing a warning to investors saying that a handful of altcoins appear poised for a corrective move following the rally over the past two weeks.
Pseudonymous analyst Cheds tells his 275,200 followers on Twitter that he is keeping an eye on the memecoin Shiba Inu (SHIB), the peer-to-peer payment protocol Litecoin (LTC), the blockchain-based gaming ecosystem The Sandbox (SAND), Uniswap decentralized exchange (UNI) and Polygon (MATIC) blockchain scaling solution.
According to Cheds, crypto-bears should watch these five altcoins closely for potential retracements.
Some altcoins worth looking at for a brief setup$ SAND$ LTC$ SHIB$ MATIC$ UNI https://t.co/SHmhKu9FUc
– Cheds (@BigCheds) July 20, 2022
Cheds also points out that the market structure of many altcoins is similar to Litecoin’s current price action, which he says is showing flashing signs of bullish exhaustion after a rally of more than 20% since July 13.
“LTC four hours [chart] head and shoulders up forming. Much of the market has this kind of look with variations, from three to four thrusts with different peaks ”.
Traders see the head and shoulders up as a sign that a market reversal may be on the horizon.
As for Bitcoin (BTC), Ched put on guard his followers last week that the major crypto asset was starting to show signs of weakness after a metric showed bearish divergence.
“BTC and ETH, both with volume balance (OBV) are diverging on the daily chart.”
OBV is a technical indicator that measures buy and sell volume, while a bearish divergence suggests a trend reversal may be in the offing. According to Cheds, a Bitcoin correction back to $ 20,600 will do solve the bearish divergence OBV.
The cryptocurrency analyst also notes that the 200 moving average on the four-hour chart is hovering around $ 20,000.
“The four-hour moving average of BTC 200 is around $ 20,900.”
At the time of writing, Bitcoin is trading hands for $ 22,556, down less than 1% from the day.
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