Cryptocurrency markets have reported further contraction over the past few days, as Bitcoin and Ethereum both edged lower on March 2, in response to negative economic data from the United States. The US manufacturing sector contracted for the fourth consecutive month, compounding the already negative sentiment in the space. Consumer confidence also fell in February, with an index reading of 120.7, a decrease from 124.3 in January. This poor set of economic data has caused Bitcoin and Ethereum to report further losses, making it an uncertain time for crypto investors and traders alike.
Crypto Markets Report Contraction as U
The U.S. manufacturing sector contracted in December as the Institute for Supply Management’s (ISM) reading fell to 47.7, its lowest level since 2009. This suggests that the economic recovery has stalled and this weighed heavily on the prices of Bitcoin (BTC) and Ethereum (ETH). As a result, BTC fell to an intraday low of $23,374.66.
The bulls were unable to sustain a breakout above a resistance level of $23,800, as the 14-day relative strength index (RSI) declined after failing to make a successful breakout attempt from a ceiling at 55.00. The current price strength of BTC is tracking close to a long-term floor of 50.00 and if it remains above this mark, prices could potentially test the next key resistance at around $25,000.
In addition, a bearish crossover on the 50-day moving average (MA) and 100-day MA further signals that near-term upside momentum may be limited. However, in spite of the contraction in the U.S. manufacturing sector, there may soon be a trend reversal as buyers emerge to take advantage of low prices to load up on BTC and ETH over the short-term.
Ethereum (ETH) on the Verge of Breaking Below its Crucial $1,600 Support Level?
Ethereum (ETH) is a blockchain-based platform which enables developers to create, deploy and operate decentralized applications. The Ethereum network has been on an uptrend since early February, with prices hitting a high of $1,672.05 on Wednesday. However, the bulls failed to hold onto that level, leading to bears re-entering the market and further intensifying the downward momentum of ETH’s 10-day moving average. As shown in the ETH/USD chart below, the downward trend line is fast approaching its 25-day counterpart, and a downward cross appears to be inevitable.
The Relative Strength Index (RSI) also suggests that ethereum is en route to a floor at 49.00. A bearish crossover of the RSI indicator could send prices even lower than $1,600 in the coming days. Should this happen, ETH will have breached its crucial support level of $1,600, allowing bears to take control of the short-term momentum.
Thus, it remains uncertain whether Ethereum can maintain above its support level of $1,600 over the next few days or not. What do you think? Do you expect ethereum to fall below $1,600 in the coming days? Leave your thoughts in the comments below.
As the US manufacturing sector contracted, both Bitcoin and Ethereum prices edged lower. Ethereum is currently edging close to breaking its crucial $1,600 support level. Despite this downward trend, cryptocurrency markets remain a promising area of investment. With the potential for rapid growth and a strong underlying technology, investors should remain confident in their holdings and keep an eye on both coins as the market evolves.