As the cryptocurrency market continues to be volatile, technical analysis of Bitcoin and Ethereum remains an important tool for traders. With U.S. economic data set to be released this week, traders are keeping a close eye on their charts for any possible breakout opportunities. Looking at the weekly chart, Bitcoin is consolidating in a tight range as it awaits a major economic announcement. On the other hand, Ethereum has slightly declined in the early trading hours of this week. In this article, we will take a closer look at how Bitcoin and Ethereum are performing and analyze the technical indicators that will help us stay ahead of the curve.
Bitcoin Consolidates Ahead of Key US Economic Data Release
Bitcoin (BTC) started the week in consolidation ahead of a key economic data release from the US. The anticipation led to some modest upside in price, but BTC/USD was unable to break through $23,000. This eventually caused the pair to slip to an intraday low of $22,331.31. The cryptocurrency has dropped by 5% in the last seven-day period and is currently trading at $22,680.37 at press time.
On the technical front, a downward crossover between the 10 and 25-day moving averages could lead to further sell-offs. One of these averages has been declining since mid-November when Bitcoin surged towards an all-time high of just under $24,000. BTC/USD has also formed a bearish symmetrical triangle pattern on the 4-hour chart which points to increased downside risk.
The 14-day relative strength index is currently tracking above a floor at 42.00, however this signals that BTC is still in overbought territory and could be due for a correction lower. To the upside, if buyers can push Bitcoin above its current resistance level at $23,180, then there could be further gains heading into next week. Investors should look for confirmation from technical indicators before entering any positions.
Staying Ahead of the Curve
Ethereum (ETH) remained mostly volatile during Monday’s session, with prices largely unchanged. The cryptocurrency dropped to a low of $1,557.36, trading in the red for a fifth consecutive session. This downward movement has pushed the 10-day moving average below its 25-day counterpart and support is now seen around $1,560. Additionally, the Relative Strength Index (RSI) has collided with a floor at 44.00, although prices remain slightly above this mark as of writing. If ETH/USD falls below this important area, there is a chance that it could drop below the crucial $1,500 level this week.
Given the recent volatility in Ethereum, investors should keep an eye on the market and be prepared to take appropriate action if prices start to decline. Technical analysis can be an asset to traders when considering potential trades and making decisions about their investments. By monitoring key levels of support and resistance and tracking indicators such as the RSI, investors can make informed decisions about when to buy or sell Ethereum.
It is also important to stay up to date on news from the industry as this can affect trends and aid in forecasting where Ethereum might go next. Analysts will often take into account developments in regulations and political news as well as changes in supply and demand when looking at cryptocurrencies like Ethereum and Bitcoin. This news can then be used in combination with technical analysis to create more accurate predictions of what the future may hold for Ethereum.
Overall, while there is still considerable volatility within Ethereum markets at present, investors can use technical analysis and other factors to help them make informed decisions about when to buy or sell this cryptocurrency. As always, it is important to do your own research before investing any money into cryptocurrencies in order to ensure minimal risks of losses. With all this taken into consideration, Ethereum could have some interesting movements over the course of this week ahead so make sure you stay abreast of all the latest updates!
As bitcoin and other cryptocurrencies become more popular and widely accepted, it’s important to stay ahead of the curve by monitoring cryptocurrency volatility. Technical analysis is a great way to do this, as it can help you identify potential price movements and react accordingly. While volatility remains high, staying informed and using technical analysis can help you make more informed decisions when investing in Bitcoin and Ethereum. With the right knowledge and tools, you can become an active participant in the cryptocurrency market and start the week off right.