In the wake of recent macroeconomic events in the past week, Bitcoin and Ethereum are off the hook. Take effect, they were able to stabilize on their respective supports. But from there to avert the threat of a wider wave of corrections until the end of the year or as early as next year, we should already restore investor confidence as soon as possible.
Given that the failure of FTX could have delayed the fallout on other risky asset classes, nothing would be less certain that the attempted return of the first digital currencies leads to a favorable result. Not to mention that the current uncertainty in the financial markets is not really calming down.
In an environment that encourages being risk-off to risk oflet’s review the latest technical analysis of BTC and ETH prices and the different possible scenarios in the near future.
Bitcoin in Weekly Units – Crossing the Descending Line in Sight?
Thanks to the fall of the dollar against the yuan below the $7 mark at the start of the week, Bitcoin would be on the verge of retracing above the bear run’s descending line since the last ATH in November 2021. With technical indicators that would not have said their last word. And more specifically the MACD, which so far refuses to cross below the signal in weekly units.
Nevertheless, caution is in order, otherwise the crossing of the downward line will be obsolete, as it was more than three weeks ago. Especially since Cryptocurrency investors should always consider Weinstein’s Phase 4. Because precisely the 30-week moving average (MM30 weekly) continues to sink south.
In case the $16,000 support holds better than expected, BTC prices may bounce back towards the $20,000 resistance. But with the likelihood that a pullback below the 2017 ATH would be a real brake on the rebound if the rules of technical analysis are observed in connection with a bear market.
In contrast, a third wave of Bitcoin bear market correction would be even more assertive. Thereby, an immediate or delayed break of $16,000 would send prices heading towards the $12,000 support. And if this worst-case scenario were to take over for good, the real question would be whether the buyers would have capitulated enough.
Ethereum in Weekly Units – Crossing the Downward Line in Sight?
Ethereum could mimic Bitcoin by possibly taming the downtrend in its run since its last ATH in November 2021. Except the rejection attempt is more momentum. In this sense, prices are approaching resistance at $1400 and the weekly 30-MA. And at the same time, MACD and RSI resume their way towards the zero line and the neutral zone at 50 respectively.
However, as in the beginning of November, the potential crossing of the descending line could again be a lure. Especially since if ETH prices cross beyond the weekly 30MM, which itself is still on a bearish momentum, the break above $1400 could be a false buy signal. And to prevent cryptocurrency investors from getting hurt, it would be wise to wait for a neutral development (or horizontal slope) of the weekly 30MM.
In the event that the rally continues, Ethereum would potentially return to contact with $1400. Even better, buyers could smile again before the end of the $1700 year. On the one hand, this would have the benefit of easing the downward pressure of recent weeks. But on the other hand, this level has caused serious problems with three consecutive failures since last summer. In short, if this scenario were to succeed, many investors would not complain.
Conversely, if ETH fails to rally the nearest resistances, we will risk reconnecting with support at $1000, not far from the lows of the year. With the blue fear that Bears would like to mark the move through triple digit prices towards the $700 support. History that the third wave of correction would take shape.
BTC and ETH – The end of their bear markets is far from over!
Like it or not, Bitcoin and Ethereum’s attempts to bounce back from their last ATHs in November 2021 have ended badly so far. Which would prove that their bear markets would not have arrived in a phase of capitulation or despair. Hence the possibility that cryptocurrencies will experience a more destructive wave of correction than the previous one. With this time, a distinction between good and bad projects that would prove legitimate for the welfare of the industry.
The fact that economic conditions may not ease anytime soon will accentuate the dormancy of both Bitcoin and Ethereum. Not only would the FED consider extending its monetary policy tightening despite the prospect of a US recession. But the US central bank’s credibility would be severely tested. Because if investors showed clarity, a return to an easy monetary policy would push inflation up.
Since the FED does not want to tarnish its reputation with the financial markets, we doubt that it will yield ground. In that case the dollar against the major currencies would regain its height in a context full of uncertainty. And de facto, the asset classes that are most liquidity sensitive would remain under pressure. This is why Bitcoin and Ethereum may experience new headwinds despite having already gained billions in market cap for more than a year.
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