BOTS crypto news week 12
After a small sell off of the cryptocurrency market this week, everything seems to be returning to normal. Bitcoin is trading around 58,000 US dollars again and Ethereum around 1,700 US dollars again. How does it look for the cryptocurrency market? Is there a chance that Bitcoin will make new all time highs next week? We discuss it in this weekly update.
Bitcoin is now in the 50,000 to 60,000 US-dollar range, as it was last week. Last week Bitcoin was under strong resistance at around 58,500 US dollars, which was its previous all time high in late February. In the previous update I indicated that I did not expect Bitcoin to have the strength to break this resistance.
As I thought bitcoin was going to correct I showed price levels where bitcoin might find support. You can see from the chart below that the first support zone of around 54,000 US dollars was not holding. Bitcoin dropped further to the second level of support around 52,000 US dollars. There Bitcoin found support and we are now trading near last week's levels again.
The question is: can Bitcoin now break the 58,500 US dollar mark and go to new all time highs?
For Bitcoin to be able to make new all time highs, first the 58,500 US dollar boundary needs to be broken and tested as support. In the following piece I will explain why I think there is a chance that Bitcoin can make new all time highs and why that chance is higher than last week.
Last week I indicated that I did not expect Bitcoin to be able to break the 58,500 US dollar mark, but instead to correct somewhat and start testing the lower support levels we discussed above. This expectation was mainly based on the fact that bearish divergence was seen on both the rsi and macd on the daily time interval. This could be deduced from the fact that the price was forming higher highs, while the oscillators were forming lower lows (blue lines). The bearish divergence indeed worked out that way and Bitcoin corrected from 58,500 US dollars to around 51,000 US dollars. Now that the bearish divergence has worked out we can look at what to expect from this week.
The rsi is showing a hidden bullish divergence after this correction, visible on the orange line, which shows that the price is making a higher high and the rsi is making a lower low. The macd is also showing a bullish conjunction. The macd is close to reverting to the green.
Looking at both oscillators, things are looking much better than last week. We are now back below the resistance of 58,500 US dollars. But as I explained above, I think there is a chance that Bitcoin will break the resistance and go to all time highs.
Ethereum has been relatively behind Bitcoin for some time. Currently, Ethereum is back above an important price level that may now act as support.
Ethereum broke through this resistance by means of a hidden bullish divergence which caused the light blue trendline to be broken.
In Ethereum, not much has changed if you compare it to last week. If the support around 1,700 US dollars holds, I think the trend is likely to continue. In my opinion, Bitcoin is the focus of attention at the moment and the direction Bitcoin takes will largely determine what Ethereum does.
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