BOTS crypto news week 22
It looks like Bitcoin and Ethereum found a bottom, at least for now. This week the cryptocurrency market recovered some of the lost gains, and it looks like the dust has settled a bit. Bitcoin is back at 40.000 US-dollar and Ethereum is eyeing the 3.000 US-dollar level. In this article I will discuss my perspective on both Bitcoin and Ethereum.
By: Steven Eblé
Bitcoin
Bitcoin is still in the range between 30.000 US-dollar and 40.000 US-dollar. Bitcoin has been in this range once before, and that was back in January. As I mentioned in the introduction, Bitcoin is back at 40.000 US-dollar, which is also the range high of the rangebound construction. Breaking the 40.000 US dollar on the weekly time frame could be quite significant because it is the first bullish signal and might indicate a trend reversal.
But the resistance has not been broken yet, so it is necessary to stay cautious. Breaking 40.000 US-dollar could mean that the next resistance zone might be targeted which is at 45.000 US-dollar. If 40.000 US-dollar is too strong of a resistance for now we could fall back to the range low.
We discussed the bull market support band a couple of times already in the last weekly updates. The bull market support band is a moving average indicator that contains the 21-week SMA and 20-week EMA. This indicator is used by traders to tell if Bitcoin is in a bull market or not. In the article ‘why I think Bitcoin is still in a bull run’, I discuss why, even though this indicator suggests otherwise, I think that Bitcoin is still in a bull run.
The bull market support band could not hold support around 47.000 US-dollar and a big red candle followed. It is important to note that this bull market support band can act as resistance just as it can act as support.
The bull market support band is now at 45.000 US-dollar, this price area is also a horizontal resistance area. So, it is important to stay cautious at those levels.
Down below we can see that Bitcoin formed a symmetrical triangle and just broke out. The measured move of this pattern could bring us to 50.000 US-dollar.
But one thing that is important to say here is that almost everyone recognized this pattern. If a trade is crowded, meaning a lot of people anticipate that it will play out, it most likely will not. This market is still designed to make the majority of the traders lose.
So, this very well could be a fake out.
Ethereum
Ethereum is doing really well in all Bitcoin’s volatility. The old all-time high around 2.000 US-dollar acted as support, as we discussed in last week’s update, in which Ethereum resumed its uptrend.
I’m now seeing an ascending triangle on Ethereum. This chart pattern is considered to be a bullish continuation pattern, which means that the chances of a bullish breakout are higher than a bearish breakout.
The measured move of this construction could bring us back to 4.000 US-dollar. Whether Ethereum reaches this target really depends on Bitcoin, Bitcoin needs to stay range bound so Ethereum can shine.
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