Despite a black Saturday that could have given rise to fears for the worst, Bitcoin and Ethereum managed to regain their respective supports of $20,000 and $1,000. But for all that, their bear markets, which have been underway since November 2021, are getting deeper and deeper. Indeed, the first two cryptocurrencies are struggling to climb the slope towards their closest resistance.
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Even though some signs of excess selling are starting to appear on the weekly charts, it does not mean that the capitulation is in progress. Nor even that the absence of a bankruptcy of a major player in the industry would suggest that there is still downside margin on BTC and ETH. This does not take into account the major uncertainties on the financial markets which still reign supreme.
Bitcoin – $20,000 support in support or in jeopardy?
If Bitcoin had its worst week of declines since its last ATH in November 2021, it has so far managed to preserve the $20,000 support. Nevertheless, investors would do well to remain on their guard. Especially since the candle of this beginning of the week is still hesitant at the time of writing this analysis. Which indicates once again thatan easing of the current dynamic is far from certain.
To tarnish the hopes of a favorable trend reversal, the 30-week moving average (MM30 weekly) continues to play up. Because effectively, it continues its downward trajectory towards the bottom of the tidy or horizontal channel (orange rectangle), after depressing the neck line of the shoulder-head-shoulder (ETE). At the same time, Weinstein’s Phase 4 is more robust than ever.
And although the RSI in weekly units is in the oversold zone, nothing says that the theory of technical analysis will conclude with a technical rebound on the support of $20,000. That being said, a possible exit from the technical indicator upwards, towards the neutral zone at 50, would favor this scenario. With the target, the resistance of $25,000 at first. And, if not, BTC prices that could head towards the supports of $16,000 and then $12,000.
Ethereum – The support of $1000 in support or in peril?
After slipping stealthily below the $1000 support the day before yesterday, Ethereum has rallied above this both critical and symbolic level. But with hindsight, this short-term jump could again come to naught with another leg down. And not only would the likelihood of seeing triple-digit prices shock cryptocurrency investors. But even worse, the support of 1000 would change polarity passing from support to resistance, with the risk of moving away from it.
Just like Bitcoin, the evolution of the weekly MM30 will not encourage investors to come back at a gallop. So much so that Weinstein’s phase 4 finds itself reinforced, thanks to the successive rupture of the last supports in record time. And apart from an oversold RSI in weekly units, the selling pressure does not show any real signs of vulnerability like the candle of the beginning of the week.
In this sense, ETH prices would rush towards the $700 support which, itself, has not been reviewed since the last quarter of 2020. This would cause a potential drop of around 85% since its last ATH in November 2021. But conversely, a hypothetical technical rebound would lead us at best towards the resistance of $1700. A level that had held up well when the UST stablecoin was melting like snow in the sun.
BTC and ETH – A technical rebound to better relapse?
The weekly charts of BTC and ETH at first glance give hope that the second wave of declines could be substantial. With the hope of a technical rebound which could take shape under certain conditions. And, in the event of this scenario, sellers who would like to sell part of their profits. Enough to consider a break from their respective bear markets.
However, if the prices of Bitcoin and Ethereum manage to rally their resistances mentioned during this analysis, the evolution of their MM30 weekly is not likely to move one iota anytime soon. Because, it would first be necessary to note a significant slowdown in their downward dynamics.
Unfortunately, given the current market environment, the first two digital currencies seem to be on track to see their Weinstein 4 phases continue, until proven otherwise. In which case, the cryptocurrency market may well be entering highly uncertain territory. With the possibility of witnessing new endogenous or exogenous events at the origin of a domino effect with unpredictable consequences.
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