Bitcoin, Ethereum Talking Points
- BTC/USD maintains rangebound momentum despite a slight move lower on the day.
- Bitcoin vulnerability remains ahead of another big week of economic data.
- Ethereum (ETH/USD) edges above trendline resistance as $1400 psychological resistance looms.
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Bitcoin, Ethereum Price Action
Bitcoin and Ethereum have remained within the confines of a narrow range as investors struggle to determine a distinct directional bias for the short-term move.
After falling to a low of $3850 in March 2020, a large amount of fiscal stimulus and an increase in institutional interest supported demand for major cryptocurrency that fueled the ‘crypto craze’.
Following a staggering 1,690% (since the 2020 low) rally that came to an end in November last year, failure to hold above $69000 allowed sellers to drive Bitcoin back to prior support turned resistance at the January low of $32950.
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However, with the Russian invasion of Ukraine exacerbating already elevated price pressures, a shift in the inflation narrative and the longer-term growth outlook triggered the sell-off in cryptocurrency that drove BTC/USD to a low of $17592.78 in June.
With intensifying global recession risks and further rate hikes largely priced in, monetary policy and a strong US Dollar have played a vital role in driving digital currency.
As the economic docket remains at the forefront of sentiment, this week’s agenda hosts several data points that may provide additional insight into the health of the global economy. Although cryptocurrency has recently shown resilience against broader systemic risks, the release of US inflation data could be a major driver for the short-term move. If inflation remains elevated, expectations of another hawkish move by the Federal Reserve in December could see prices continuing their decline.
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Bitcoin (BTC/USD) Technical Analysis
With recent price action consolidating between $18183 (Monthly low) and $19666 (Dec 2017), additional selling pressure and an increase in bearish momentum below $17592 (June low) could see prices falling back towards the next big zone of support at the June 2019 high of $13880.
Bitcoin (BTC/USD) Daily Chart
Chart prepared by Tammy Da Costa using TradingView
Bitcoin Key Levels
| Support | Resistance |
|---|---|
| S1: 18183 (Current monthly low) | R1: 19666 (Dec 2017 high) |
| S2: 17792.1 (78.6% Fib 2020 – 2021 move) | R2: 20000 (Psych level) |
| S3: 17592.78 (June low) | R3: 22718 (September high) |
Ethereum Technical Analysis
As Ethereum follows in Bitcoin’s footsteps, a temporary rise above trendline resistance on the daily chart has turned into support for the second largest currency. As bulls look to reclaim the psychological level of $1400, the $1200 remains critical for the downward move.
Ethereum (ETH/USD) Daily Chart
Chart prepared by Tammy Da Costa using TradingView
— Written by Tammy Da Costa, Analyst for DailyFX.com
Contact and follow Tammy on Twitter: @Tams707
