After an encouraging rally over the past month, Bitcoin (BTC) and Ether (ETH) prices have finally faced a major resistance area. It’s going to have to bounce back quickly, or else the crypto-currencies will once again head for a bigger drop.
Bitcoin (BTC) gives a new bearish signal
After correcting about 50% of its last drop, the price of Bitcoin (BTC) has finally started to fall again towards an important support at $17,000. While for the moment the price has bounced off its Kijun Daily, it’s not clear if it will hold this level for very long due to the cloud of resistance in addition to the Tenkan Weekly.
Figure 1 – Bitcoin Daily Price Chart
Indeed, Bitcoin has been in a small range (horizontal price) since the beginning of November and has been bumping into the Tenkan Weekly at $18,400 in the last few days, which is also the bottom of the previous 5 month consolidation.
This former support became a resistance and instantly took effect when the price tried to break back through this area. Since then, it has been heading dangerously towards a break of the support it had built up in recent weeks at $17,000. Note that the underlying trend remains clearly bearish, with highs getting lower and lower.
To become optimistic again, we should therefore count on a rebound around this zone, otherwise the risk will be a return to the lower part of the small range at $15,700. And if it were to break this next support, then the price would risk plunging this time to $14,300, the area that corresponds to the target breakout of the Bear Flag that we have been monitoring since its breakout several months ago.
Figure 2 – Bitcoin price chart h4
In the last few hours, BTC has also broken an ascending wedge from the bottom and has a target at $15,700. The odds are therefore still in favour of a bearish scenario which would only be invalidated in the event of a return above $18,600, the level of the Tenkan Weekly.
Ether (ETH) soon under $1,000
Like BTC, the price of Ether (ETH) has also broken out of a triangle that should take the price to $1,048 here. This is a continuation triangle which also gives the price a higher probability of falling. To avoid this bearish scenario, it will be essential to bounce off the support at $1,200, which is currently being retested by the price.
Figure 3 – Ether Price Chart (Daily)
If the price returns to the $1,000 area, then it will certainly continue to fall further as the bottom target is still at $762 (break of the Daily Ascending Beam from below).
Conclusion of this technical analysis
Bitcoin and Ether are not showing any signs of reversal at the moment. It therefore seems more likely that the fall will continue on the crypto currencies until the market shows signals of reversal.
