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Bitcoin, Ethereum, Cryptocurrency, BTC / USD, ETH / USD – Talking Points:
- The long-term outlook for both Bitcoin and Ethereum remains skewed upward.
- However, both cryptocurrencies could be at risk of a short-term pullback, as their respective increases seem relatively exaggerated.
As mentioned in previous reports, the provision of extraordinary measures of fiscal and monetary stimulus In response to the new coronavirus pandemic it has propped up the prices of Bitcoin and Ethereum since the March nadir.
Although the longer-term outlook for both cryptocurrencies remains overly optimistic, their recent surges appear somewhat overextended. This suggests that there could be a short-term pullback. These are the key technical levels to watch out for for BTC and ETH in the coming weeks.
Bitcoin (BTC) Weekly Chart: 300% Fibonacci Limiting Upper Potential
Bitcoin weekly chart created with Tradingview
Bitcoin has risen more than 83% in the last 3 weeks after surpassing the psychologically imposed mark of $ 30,000, and prices are now probing the key resistance at the Fibonacci expansion level of 300% (35352).
However, with the RSI approaching its highest weekly overbought readings since 2013, and with prices substantially above the 8-week exponential moving average (23110), a downward correction appears likely in the near term. .
Failure to achieve a firm position above $ 35,000 would likely allow sellers to push prices back to psychological support at $ 30,000, with a break below carving a path to test previous resistance turned support on the implied measured move of the Symmetric Triangle (28108).
Alternatively, a convincing momentum above 300% Fibonacci could bring the $ 40,000 mark to bear.
Bitcoin (BTC) Daily Chart – Shooting Star Suggests Short-Term Pullback
Bitcoin daily chart created with Tradingview
Zoom in on the daily time frame also suggests the possibility of a short-term pullback for the popular cryptocurrency, as a bearish Shooting Star candle begins to take shape just below the 200% Fibonacci expansion (35114).
A reversal towards the psychological support at $ 30,000 appears on the charts if the buyers fail to overcome the Fibonacci resistance. Erasing that would likely propel Bitcoin back to support at the December 27 high (28244).
On the other hand, a daily close above $ 35,000 could cause prices to push towards the 227.2% Fibonacci (36913).
Ethereum (ETH) Weekly Chart: Targeting Key Resistance at $ 1000
Ethereum weekly chart created with Tradingview
Ethereum has also risen higher in the past 3 weeks, rising more than 65% to test key resistance at the February 2018 high (979).
However, with the RSI rising to its most overbought readings since 2018, the second most traded cryptocurrency could risk a bearish reversal in the near term.
Failing to break above the $ 1000 mark could generate a downward push towards the May 2018 high (838), with a break below focusing on the $ 700 level.
On the contrary, breaking the psychological resistance could neutralize the short-term selling pressure and open a path for the price to challenge the all-time high (1424) set in January 2018.
Ethereum (ETH) daily chart: 200% Fibonacci in focus
Ethereum daily chart created with Tradingview
However, the daily time frame suggests a greater advantage for Ethereum in the short term, as buyers push prices through a flurry of key resistance levels at the 161.8% Fibonacci (956.27) and February high of 2018 (979).
That being said, the recent momentum to the upside appears to be over-extended as the distance price drifts from the 8-day EMA (781.45) and the extreme overbought readings seen on the RSI.
Therefore, an aggressive pullback towards the May 2018 high (838) could be in the offing if the price fails to close above the psychological resistance at $ 1000 on a daily close.
Erasing that is likely to precipitate a challenge from the former resistance turned support at the December high (757.67).
Conversely, a daily close above $ 1000 could open the door for buyers to begin probing the 200% Fibonacci expansion level (1108.76).
– Written by Daniel Moss, DailyFX Analyst
follow me on twitter @DanielGMoss
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