Bitcoin (BTC) and Ether (ETH) are finally correcting after more than a month of bullish rally. A healthy correction to better go break their range or is it still the beginning of a sharp fall? The point in the analysis of the week.
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Bitcoin (BTC) rejected at the top of its range
As discussed in our previous technical analysis, Bitcoin (BTC) price finally hit its range high around $24,300. Now, against a background of news that is not conducive to a continuation of the rise in the short term, with in particular the staking of cryptocurrencies threatened by the SEC in the United States, cryptocurrencies are correcting and starting to fall again.
It must be said that this fall was expected by many investors in a crypto market, which will have taken off in a straight line for more than a month, leaving the hope of buying Bitcoin below 15,000 dollars. slim down. The current correction is therefore an opportunity for some to enter in stages after a drop of +11% in one week.
Figure 1 – Bitcoin Daily price chart
So is this the end of this crypto bull rally? It would seem not. Indeed the objective determined by the chartist pattern in yellow (Drooping Wedge) is still around 26,735 dollars (height of the triangle at its entry, reported to the place of its breakout) and will remain active as long as the price remains at above the low of the range at $19,000.
In general, this type of pattern gives good probabilities for the price to reach its target. In theory, therefore, it seems quite logical that Bitcoin manages to bounce off the key areas determined by the Fibonacci retracement above. BTC is likely to continue falling towards the 0.5 Fibo at $20,000 or even the 0.618 at $19,145. These levels are indeed the most regularly revisited during corrections and they are therefore to be preferred.
As long as the price bounces off one of these levels, then this correction will remain healthy and will most likely allow BTC to rally better afterwards towards the target at $26,735., the price remaining supported by the cloud and many supports. On the other hand, if it goes back below the 0.618 Fibonacci, then there will be a risk of breaking the range again from below because the probabilities will be strong to witness a 100% retracement of the January rise towards 16. $600.
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Ether (ETH) Follows Bitcoin and Plunges
It is the same on the course of Ether (ETH) where the price has been falling for several days. It seems to be heading towards the middle of the range, which it will absolutely be necessary to keep in support in order to hope to break this large rectangle from the top with the objective at $2,608 determined by the triangle in yellow. The mid-range zone having served as resistance several times before, it may be quite logical that it now acts as support to allow the price to rebound.
Figure 2 – Ether price chart (Daily)
The levels that the price could rely on are located at $1,433 (0.5 Fibo) or even $1,372 (0.618). If these levels do not allow the price to rebound, then they will turn into resistance and result in a 100% retracement of the January high with a very likely price return to $1,200.
The next few days will therefore be decisive for Ether as well, which will have to find enough liquidity to rebound and succeed in breaking its range and its resistance at $2,000 from above.
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Conclusion of this technical analysis
Bitcoin and Ether still fail to break their range from above. The current correction is an important test that will allow us to know if cryptocurrencies can recover calmly when they break out of their range, or if they will have to correct further in the coming weeks to recover enough liquidity.
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Passionate about crypto-currencies since 2017 and fervent defender of knowledge sharing, I am a Youtuber, crypto analyst and regular trader. Every week, my role is to make you aware of technical analysis by giving you my point of view on the evolution of the price of Bitcoin and Ether, using my favorite indicators such as the Ichimoku as well as chartist patterns.
