Even though the past week has gone well for equity indices, we cannot say the same for Bitcoin and Ethereum. Indeed, the latter have just chained yet another consecutive week in the red. To the point of wondering whether the hypothesis of a decorrelation between the two classes of risky assets might not be about to occur. But as a week is not enough to make a trend, it seems important not to put the cart before the horse too quickly.
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Cryptocurrency investors should focus on the current price momentum of BTC and ETH. Because everything suggests that these are bear markets that present themselves in front of them. And this even if technical rebounds were to emerge. Because the current market context does not allow us to question the main unfavorable technical signals on the weekly charts.
Bitcoin – The $30,000 support in resistance mode
Bitcoin sees its black series give birth to a ninth consecutive week of decline. But despite this grim historical record, Monday’s open slightly above the $30,000 support suggests a possible technical bounce. So much so that sellers would consider that they have made large enough gains while waiting for new episodes of stress.
But a noticeable recovery in the technical indicators would be welcome, in addition to the current support at $30,000. With some premises that still need to be confirmed in the coming weeks. With as a starting point, a slight rebound in the RSI. While at the same time, the MACD is struggling to close its gap with the signal.
As a reminder, the technical bounce is part of a classic process recorded during Bitcoin bear markets. With an evolution of the 30-week moving average (MM30 weekly) which continues a downward trajectory, as well as the descending line. This confirms a phase 4 of Weinstein. And on the other hand, a number of major resistances to overcome which are not lacking. Because, in the current configuration, even a reinstatement of Bitcoin inside its tidy or horizontal channel (orange rectangle) would not be enough to reverse this trend.
Ethereum – The support of $1700 in resistance mode
Ethereum has preserved its critical support at $1700. And this despite the dark historical record of eight consecutive weeks of decline. Therefore, it could trigger a technical rebound from this level. However, crypto investors will need to remain measured against the forces at work on the weekly chart.
First of all, the downward slope of the weekly MM30 clearly indicates that Weinstein’s phase 4 is well underway. So much so that she is very close to the downline. Second, the technical indicators remain deep below their respective float lines, even in the event of a technical bounce in ETH prices. Finally, the resistance of $2300 which corresponds to the bottom of its tidywould not be easy to break. Mainly because it formed during the week of panic related to the collapse of the stablecoin UST.
Since Ethereum has a history of following Bitcoin during its bear markets, a technical rebound in Satoshi Nakomoto’s digital currency would help it temporarily move away from the $1700 support. Nevertheless, clinging to small patterns of hope will not change ETH’s bad momentum. Especially since its last failure below the resistance of $3400.
BTC and ETH – Waiting for technical bounces?
If, however, Bitcoin and Ethereum manage to hold their respective supports, technical bounces could take place. Not only would this not be surprising, after more than two months in the red in the cryptocurrency market. But a bear market also needs some upside breathing in order to maintain its momentum.
Unless a leading catalyst succeeds in removing the current uncertainties in the financial markets, sellers remain in a position of strength. Even more so with very distant reversal levels, compared to the current prices of BTC and ETH. And to make matters worse, an absence of bullish chart patterns in weekly units. And the near certainty that they will not form any time soon.
This is why technical rebounds generally give the impression of delaying the expiry of a new phase of panic or capitulation. So, as long as Bitcoin and Ethereum do not stabilize on a defined price zone and practically integrate the bad news, expect their bear markets to continue to retrace. And this during a good part of their up cycles, since the low points of March 2020.
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