BOTS crypto news week 4
The Cryptocurrency market has been very volatile lately. Price fluctuations of more than 10% per day are becoming increasingly common. We thought it would be a good idea to take stock of this hectic market every week, to provide an overview. In this first Crypto market analysis, we will focus on Bitcoin and Ethereum.
By Steven Eblé
Bitcoin experienced a sharp price increase in late December and early January. The currency went from around 20,000 US dollars to more than 40,000 US dollars. An increase of more than 100% in less than a month. Meanwhile, Bitcoin has had its first real correction of the year and it is expected that a period of consolidation will be needed before Bitcoin embarks on its next impulse wave.
From the chart below, you can see that Bitcoin is in a falling wedge pattern. This is where Bitcoin broke out yesterday afternoon after Elon Musk put 'Bitcoin' in his bio, but this rebound was short lived. Indeed, the support zone around 35,000 US dollars could not hold, so we have now fallen back into the construction. However, this is no reason to panic, as a falling wedge construction is considered a bullish continuation pattern in technical analysis. This means that Bitcoin is more likely to eventually exit the falling wedge construction on the upside than on the downside.
The chart below also shows that the 30,000 US dollar support zone has been tested at least five times and has held up. I expect Bitcoin to consolidate a bit more in the coming weeks, but eventually break out of this falling wedge bullishly. The measured move of this construction could in theory go to around 50,000 US dollars, but first 35,000 US dollars limit must be broken and start acting as support.
Unlike Bitcoin, Ethereum has not yet broken its all time high from December 2017. In my article 'What to expect from Ethereum and alt coins in Q1 2021', I already indicated that things were looking good for Ethereum. I showed that Ethereum often makes its price rise after Bitcoin, and that this happens when Bitcoin starts a period of consolidation.
In the chart below you can see that Ethereum keeps making higher lows just below its all time high of around 1450 US dollar. Also the RSI and the MACD indicate that there is still much room for growth. The chart below even reminds me of the chart of Bitcoin below 20.000 US dollar in December 2020. Bitcoin in fact made a similar construction as Ethereum is doing now. The coming week will show if Ethereum has the power to break its all time high. If Ethereum succeeds in doing so, the measured move of the construction will be around 1800 US dollars.
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