Backed by the unprecedented crisis at FTX Group, Bitcoin (BTC) and Ether (ETH) are plunging to new lows. Will the cryptocurrencies manage to rebound or should we expect further falls in the coming days? We take a look at the situation in this analysis.
Bitcoin (BTC) to fall towards $14,000
It’s a tidal wave that has been shaking the cryptocurrency ecosystem for the past few days.
Due to this unprecedented crisis within the FTX group, the price of Bitcoin (BTC) collapsed this week below $15,500 and dragged with it the fall of altcoins to new lows that had not been visited since November 2020.
While the situation seems rather uncertain, especially for FTX customers who saw their assets frozen very quickly after the first rumours of the platform’s insolvency, crypto-currencies are threatening to fall again despite an economic context in the traditional markets that seemed to improve.
The news shows us a decorrelation between crypto-currencies and stock markets, which has not happened for a long time.
So, what levels should we be watching for in the next few days
Figure 1 – Bitcoin Daily Price Chart
In our previous analysis, we had observed the rejection of the price in the middle of the range (blue rectangle) that has been building for several months now. This lateralization will finally have waited for the events of the last few days to have a resolution, here from below.
Following the breakout of this range, the target to aim for seems to be the $14,300 level, which corresponds to the height of a Bear Flag that we have been watching for several months. The target was triggered long ago and the price is thus following our preferred scenario.
Once the price reaches $14,300, we will have to watch its reaction to see if we have a chance of hitting a bottom.
On the weekly chart, we have a descending wedge in which the price has been moving since the beginning of this Bear Market. We can imagine that breaking it from the top would trigger a new bullish rally.
Unfortunately, we still have the Cloud, the Kijun (purple) and the Tenkan (turquoise) standing in the way of price and threatening a return to the triangle’s lower support around $14,000.
What is relevant is that this support level corresponds in every way to our daily target, but also to a Fibonacci extension which gives the target level of $1.618 to $13,965 if we take the last high points.
Figure 2 – Bitcoin Weekly Price Chart
So everything seems to point to a return of Bitcoin to the $14,000 range. To invalidate this scenario, it will be necessary to regain the Kijun around $20,000, a level that would also correspond to the upper part of the Descending Bevel in yellow and therefore to its breakout.
If we break this pattern from the top in the next few weeks, then we could have hit the bottom of this Bear Market.
Ether (ETH) on its way to $762
After a strong rejection on its Weekly Kijun, the price of Ether (ETH) is back down this week and also threatens to break its range from below.
Following the partial rotation in the middle of the range, we now have a strong chance of breaking out of this lateralization from below with the target at $762 which corresponds to the height of the Ascending Bevel at the breakout point.
Figure 3 – Ether Price Chart (Daily)
In order to invalidate our bearish objective, it will be necessary to break above $2,000 (top of the range) to form a new high point in this market and thus obtain a break of the bearish structure. For the moment, we must therefore once again favour bearish set-ups and targets.
Conclusion of this technical analysis
Bitcoin and Ether are heading back down, looking for a new bottom that will allow the ecosystem to start a new bullish cycle.
In addition to the technical analysis, it will of course be necessary to take into account the macroeconomic context as well as the crypto news related to FTX, which is likely to be more than decisive for the future.
