Bitcoin (BTC) and Ether (ETH) have been back on support for several days now and are about to move again. So, new fall or bullish return?
Bitcoin is back on its support
After breaking its Kijun a few days ago, the price of Bitcoin (BTC) has continued its correction towards its daily support at $40,000. A level that it must absolutely hold at the close in the coming days to avoid a new sell signal.
Figure 1: Bitcoin Daily Chart
Just as the market seemed to be regaining buying strength, the price of Bitcoin finally pulled back, heading for the bottom of the ascending range that has been in place since the beginning of the year. Although the $40,000 level has already been used to rally six times, investor sentiment is currently in the “Fear & Greed Index”.
This is understandable since this pattern, in which the price has been evolving for several months, is an ascending wedge and thus gives a greater probability of breakouts from below. This fear of a new correction is amplified by a new breakout test of the Ichimoku cloud, which is very weak and could in the coming days provide resistance to the price. In the event that BTC breaks this support, the odds of a move back towards the next support level at $37,000 would be strong. The objective of breaking the wedge is indeed at $34,000.
It is therefore imperative that BTC reacts in the next few days, with a return above $43,800 (Kijun flat). If the Bitcoin manages to recover this level, we can then expect a possible exit from this range from the top, towards the $58,000 mark.
Ether to $4,625 soon
Unlike Bitcoin, the price of Ether (ETH) remains well above its cloud, giving hope for a continuation of the upward trend in the medium term.
Figure 2: Ether (ETH) Daily chart
Since the beginning of the month, the ETH has been offering us a nice setup, as it has broken out of a descending wedge on its daily chart with a theoretical target of $4,625 (the highest point of contact within the pattern).
As long as the price continues to move above the cloud as well as above the sideways support at $2600, we expect to reach our target in the coming weeks.
Should price finally break this support, the next bounce level would be at $1,800.
In conclusion
Having been tested multiple times in the past, the current support levels for Bitcoin and Ether are clearly identified and will absolutely have to help the price break out again in order to go after the triggered targets. If not, a new correction will take place, with the price returning to the following support levels.
