BITCOIN, BTC/USD, ETH/USD, ETHEREUM, CRYPTOCURRENCY – KEY POINTS:
- The long term outlook for both ethereum and bitcoin remains skewed to an uptrend
- Nevertheless, both cryptocurrencies might be at the risk of a short-term rebound, as their respective rise higher seems quite overextended.
As indicated earlier in the previous reports, previous of the extraordinary monetary and fiscal stimulus measures with regards to novel covid-19 pandemic had underpinned ethereum and bitcoin prices from March 2020 nadir.
While the long term outlook for both cryptos remains overly bullish, their latest upside rise seems somehow overextended. This shows the near term rebound can be at hand. Following are the technical levels to watch out for ETH and BTC in the next few weeks.
Bitcoin has risen more than 83% in the past 3 weeks after nudging over the psychologically imposing $30,000 level, with the prices currently probing the immediate at 35352 Fibonacci (300% expansion level).
Bitcoin (BTC) Chart
Nevertheless, with the relative strength index approaching the highest weekly oversold zone readings from 2013 and the prices substantially tracking over 8-week exponential moving average at 23,100, the correction lower looks highly likely in the short term as Bitcoin Rallies Beyond $30,000 For The Very First Time.
Failing to surge strongly over $35,000 will most likely allow the sellers to drive the prices back to the psychological support at about $30,000 with the break under carving the path to further test previous resistance turned support at symmetrical Triangle implied measure shift (28108).
On the other hand, a convincing nudge over the $40,000 Fibonacci (300% retracement level) level into the crosshairs.
BTC Daily Chart
A closer look into the timeframe also points to the chances of a near term rebound of the popular cryptocurrency, as the bearish Shooting Star candlestick starts taking shape just shy of 35114 Fibonacci (200% expansion level).
However, the daily close over $35,000 might see the prices push towards 36,913 Fibonacci (227.2%).
Ethereum Weekly Chart
Also, Ethereum seems to have stormed higher over the past 3 weeks, rising above 65% to also test key resistance on 979 Fibonacci (2018 high).
Nevertheless, with the Relative Strength Index rising to the highest oversold readings from 2018, the 2nd most heavily trading cryptocurrency can be at the risk of a more reversal in the short term.
A failure to clear the new $1000 level might generate the downtrend nudge towards May 2018 peak (838) with the break below bring a $700 level into more focus.
On the other hand, breaking the psychological resistance will neutralize the short term selling pressure and model the path for the price to challenge to record peak (1424) set in January 2018.
However, the daily timeframe refers to a more uptrend for the Ethereum in the short term, as traders drive the prices through the key resistance mark at 956.27 Fibonacci (161.8% retracement level) and 979 the February 2018 high.
ETH Daily Chart
Having said that, the latest upside budge seems more extended, considering the distance price is moving from 781.45 (8-day EMA) and the extreme oversold readings seen back on the relative strength index.