Jump to content

Bitcoin, Ethereum Finds Major Resistance – Levels to Consider


Recommended Posts

BITCOIN, ETHEREUM ANALYSIS:

  • Bitcoin’s bullish move at risk around zone of resistance
  • Ether (ETH) highlights potential range, conditional upon upside rejection
  • Crypto Fear and Greed Index offers insight into recent crowd psychology
TrueDigital Expands Distribution of Its Bitcoin and Ether OTC Reference  Rates - CoinDesk

BITCOIN GRINDS HIGHER BUT FACES HUGE LEVELS OF RESISTANCE

Bitcoin started the year in the same way it finished 2021, trending lower. Throughout January, BTC made lower lows and lower highs as a surging US dollar and hawkish Fed expectations weighed on the non-interest bearing asset. Additionally, the recent US – Russia tensions over Ukraine hasn’t helped risk assets, with bitcoin falling well within that category.

However, recent diplomatic efforts to calm the US-Russia tensions has provided a period of relief for risk assets as we have witnessed broad pullbacks in global equities and various JPY crosses (notably AUD/JPY, GBP/JPY). The situation, however, remains rather volatile and can change at any stage. Therefore, movements in BTC are expected to be news dependent and reactive in nature.

The recent uptick in bitcoin appears rather unconvincing, especially when comparing it to previous bullish moves that have produced greater momentum and volatility skewed to the upside. Looking at the chart, it becomes clear to see that BTC pivoted short of the major inflection point/zone around 29k/30k, meaning that a failure to break above the descending trendline - acting as support – opens the door to the 29k/30k retest. Additional resistance, should the breakout occur appears around the 41,500 to 42,500 zone. Therefore, the conditions around a sustained bullish move remain rather

Bitcoin (BTC) Daily Chart (Zoomed out to Highlight Major Zones)

Bitcoin, Ethereum Finds Major Resistance – Levels to Consider

Source: IG, prepared by Richard Snow

 

ETHER PIVOT COULD SIGNAL THE START OF POTENTIAL RANGE

Ether, like bitcoin has witnessed a calm move higher from the January low. The daily chart showed a cluster of consolidation around the 76.4% Fib at 2466 and now looks to test the 2930 level of support at the 61.8% Fib level. Failure to trade above 2930 could see another move back towards 2466. The breakout scenario, on the other hand, brings in the 3385 level as nearest resistance.

Ether (ETH) Daily Chart

Bitcoin, Ethereum Finds Major Resistance – Levels to Consider

Source: IG, prepared by Richard Snow

BEHAVIORAL FINANCE WITH THE FEAR AND GREED INDEX

The ups and downs of the psychology of trading is often amplified when trading volatile crypto markets and therefore, it is crucial to understand not only your personal strategy and emotions but also the emotions of the ‘crowd’.

Learn how to manage the emotions of trading

The Crypto Fear & Greed Index adopts a similar concept to CNN’s equity-related fear and greed index and tracks volatility, momentum, BTC’s performance vs alt coins and social media activity when determining the figure. This reading has been well within the fear segment of the reading which may present buying opportunities for value investors looking to secure lower dollar-cost-averaging within a wider portfolio of crypto assets. History shows us that periods of fear are followed by periods of greed however, the indicator provides no guidance on timing which is why the technical levels remain relevant.

Crypto Fear and Greed Index

Bitcoin, Ethereum Finds Major Resistance – Levels to Consider

Source: alternative.me, prepared by Richard Snow

 

Written by Richard Snow for DailyFX.com. 2nd Feb 2022

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Posts

    • Sainsburys full year earnings and Unilever’s first quarter trading update both say the same thing, UK consumers are in for higher prices. The war in Ukraine, supply chain issues and the effects of ongoing Covid all to blame.      
    • US Dollar (DXY) Daily Price and Analysis US Q1 GDP may stall the greenback’s advance. A 20-year high nears for the US dollar. The multi-month US dollar rally continues with the greenback printing a fresh high today ahead of the first look at US Q1 GDP at 12.30 GMT. The US dollar basket (DXY) has been boosted by renewed weakness in the Euro and the Japanese Yen, as investors move from lower-yielding to higher-yielding currencies, while safe-haven flows continue to benefit the greenback. The US growth release later in the session is expected to show a sharp slowdown from the robust Q4 figure of 6.9%. The markets are currently pricing in growth of just 1% for the first three months of this year, with the slowdown mainly due to a reduction in inventory accrual over the quarter. This release is unlikely to move the greenback, unless there is a large miss or beat, as the Fed believe that 2022 US growth will be robust enough to let them tighten monetary policy sharply without damaging the economy. The latest US Core PCE data – the Fed’s preferred inflation reading – is released on Friday and this may have more effect on the US dollar than today’s GDP data. For all market moving economic data and events, see the DailyFX Calendar. The ongoing US dollar rally has been aided by weakness across a range of G7 currencies including the Euro, the Japanese Yen, and the British Pound. The Euro continues to battle with lowly growth expectations, exacerbated by energy concerns, the British Pound is mired by weak economic data, while the Japanese Yen is in freefall as the BoJ continues with its ultra-loose monetary policy.   The US dollar continues to press higher and looks set to break above 103.96, the March 2020 high. Above here the US dollar would be back at levels last seen nearly two decades ago. The March resistance will likely hold in the short-term, especially with month-end portfolio rebalancing at the end of the week, but US dollar strength is set to continue in the months ahead. USDOLLAR (DXY) WEEKLY PRICE CHART – APRIL 28, 2022 {{THE_FUNDAMENTALS_OF_BREAKOUT_TRADING}} What is your view on the US Dollar – bullish or bearish?   Apr 28, 2022 | DailyFX Nick Cawley, Strategist
    • While Tesla has nothing directly to do with Elon Musk buying Twitter - TSLA stock closed down 12% on news that Musk may have to sell stock and use other holdings to stand against the loan to finalise the purchase of the social media giant.        
×
×
  • Create New...