Bitcoin and Ethereum Awaiting Confirmation of Market Direction

Data & Research / 25.10.2019

Key Takeaways

  • Bitcoin reaching key support zone.
  • Ethereum appears to want a rally, but lacking conviction on USD and BTC pair

BTC/USD

Weekly

Daily

After ranging for 26 days, Bitcoin decided to make a move – many were expecting a bounce, but this proved to be premature.  On Wednesday, BTC/USD fell through its range support at the $7800 zone, finding a new local bottom at $7308. The 200 week moving average was acting as support for this range until price fell through it, indicating buyer exhaustion.

From a macro perspective, this drop can still be considered a healthy pullback. The market is yet to decide its new intermediate bottom, though price won’t likely venture too far down – at least in the short-term – as it would first have to absorb substantial buy-side liquidity. Firstly, around the $7250 mark, there is support from the bullish trendline as well as the bull flag’s lower range, acting as strong demand zones. Secondly, the confluence of the 50 week moving average and previous range top at $6760 act as a second support area.

Plunging through these two liquidity pools however, would signal bearish control that the market is not yet ready to move upwards. So keep an eye on the weekly close: if price pulls back above the 100 week moving average, than it could have just been a fake-out.

ETHEREUM

ETH/USD

Weekly

Daily

Since the intermediate high at $366, ETH/USD has corrected 58%. Currently, price is sitting in a falling wedge without any strong signs of life, and relatively low volume compared to Q1 and Q2 of this year.

It appears ETH/USD has printed 3 swing-failure patterns dipping below the $155 support area, so keep an eye out if it reclaims the previous range bottom at $169 indicating bullish interest. Ideally however, price would have to break and consolidate above the descending wedge’s resistance line to signal bullish continuation.

ETH/BTC

Weekly

Daily

ETH/BTC has been on a steady downtrend since its all-time high in Q1 2018, although now it appears poised for a reversal. If the trendline support holds and price breaks above the range resistance at 0.02222, then the market could try to reach for the 0.02516 area.

However, if support doesn’t hold, bullish risk-averse traders should set their bids at the 0.01885 support area: the main demand zone.

In summary, look for confirmation in in BTC and ETH price action before executing a trade!

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Patrick is a third culture kid born to Brazilian parents, who enjoys reading, writing and thinking. He believes we need to be relentlessly improving models for investing in good ideas and moving them from the lab to the market, which naturally draws him to the cryptocurrency and blockchain space.