Key learning points
- Bitcoin is stuck between $21,500 and $21,000.
- Meanwhile, Ethereum is trading between $1,250 and $1,190.
- Closing outside these trading ranges will determine the direction of the trend.
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The cryptocurrency market had a quiet weekend as the two best assets by market cap, Bitcoin and Ethereum, continued to consolidate. However, a significant price movement seems imminent.
Bitcoin and Ethereum Ready for Volatility
Bitcoin and Ethereum were quiet over the weekend, but a few indicators suggest that volatility is about to resume.
BTC is stuck in a tight price range between $21,500 and $21,000, while ETH continues to trade between $1,250 and $1,190. Both cryptocurrencies have seen their prices drop in recent days as the market sentiment remains in “extreme fear”. Interestingly, a certain technical indicator indicates the likelihood of a downswing.
The Tom DeMark (TD) Sequential indicator recently presented sell signals on the Bitcoin and Ethereum nine-hour chart. The bearish formations developed as green nine candlesticks, indicating a correction of one to four candlesticks. While BTC and ETH have taken a brief dip after technical development, there has been no apparent breach of support or resistance.
Transaction history shows two critical price points that can help determine where Bitcoin is headed next. About 882,400 addresses had previously purchased more than 570,000 BTC between $20,800 and $21,500. Meanwhile, more than 200,000 addresses have more than 210,000 BTC $21,500 and $22,100.
Given the lack of resistance going forward, a sustained nine-hour candlestick above $22,100 could be significant enough to trigger a bullish breakout toward $25,000 or even $27,000. But if the $20,800 support level were to give up, the next critical interest rate zone would be at $19,000.
Transaction history also shows that Ethereum cannot afford to lose the $1,100 support level. Breaking such a vital demand zone could trigger another sell-off sending ETH to $600. Therefore, it is imperative for Ether to cut through the $1,320 resistance barrier to have a chance of moving towards $1,700.
The macroeconomic outlook still doesn’t look good as fears of a recession mount. For this reason, it is necessary to wait for a decisive close below resistance or above support to enter the markets. Although a few stats suggest that the bottom is near, there may be more downward movement before the trend reverses.
Disclosure: At the time of writing, the author of this piece owned BTC and ETH.
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