The flagship cryptocurrency continued on a downswing on Tuesday.
The BTC/USD pair started the trading day with a moderate decline toward $10,400 off the open at $10,537. Later on, the price recovered the loss, having bounced up to $10,560 at midday, but being pressured by a local resistance level on the hourly chart, the price slipped lower under the bear sentiment and below the local at around $10,440 in the evening hours of the day. Near 21:00 UTC Bitcoin slipped to $10,150, where the 0.618 Fibonacci level is positioned, but quickly rebounded to $10,250, which indicates the influence of the level along with the $10,196 technical daily support level.
Bitcoin obviously seems to have failed to break to the $11,625 weekly resistance level and above the 50-days simple moving average that has kept it under pressure throughout its recovery course off the early September lows. Now, the BTC/USD trading pair looks headed to the region of where Bitcoin consolidated in the early September, which is between the 0.618 Fibonacci retracement level at $10,142 and $10,196. If consolidation happens again, we will see a double bottom on the daily chart, which will be a strong uptrend reversal pattern. But now we need to see how Bitcoin will react to the $10,196 daily support level and the 0.618 Fibonacci level.
More Downside Risks in Store for Ethereum
On Thursday, 23rd September, the smart-contract leader breached a local support level at $334 that has recently kept ETH/USD away from further losses. At its open, Ethereum followed in Bitcoin’s footsteps, edging lower from Thursday’s open at $344 to $334 at around 8:00 UTC. Later on, Ethereum recovered some of that loss, rising to nearly $343 at midday. But its further upside price action was denied by the closely sitting 20-period and 50-period simple moving averages on the hourly time frame. The evening hours were a free fall for Ethereum, in which it plunged as low as $313 at around 9:00 UTC, closing Thursday’s session at $319.
The breakdown below the key support level at $334 is a serious threat of a long-term bear market for Ethereum. However, considering the fact that almost all cryptocurrencies, including Ethereum, are substantially dependent on their price action on Bitcoin, the Bitcoin market will play an important role in the near-term development of Ethereum trading. Even with the breakdown below $334, a long-term bear market may not happen for Ethereum if Bitcoin continues sideways in the next few days. It will lend support to Ethereum as well as to the entire cryptocurrency market. However, if that does not happen, a lot more falling is in store for Ethereum, as there is no technical support for it until $228, with the Fibonacci 0.236 level at $290 being the only counterforce.
What to Expect for the Rest of the Week
With Bitcoin swiftly bouncing up from the 0.618 Fibonacci level and the $10,196 daily support level, the sharp downside move is likely at its end. The sideways channel formed in early September makes a second consolidation all the more possible. Therefore, sideways trading is the likeliest course for the rest of the week for BTC/USD.
The further consolidation that may take place for BTC/USD in the price range of $10,200 and $10,400 will likely create more stimulus to Bitcoin’s recovery above $11,000 than the previous one did. If that scenario works, it will ease bear pressure on Ethereum, letting the smart-contract giant bounce off its current lows. Provided that Bitcoin continues sideways for the rest of the week ending 27th September, we are eligible to expect an ETH/USD rebound above $330.
Executive Director at CEX.IO. His area of responsibility includes customer relationships with institutional and VIP-clients, overseeing the creation of the company’s development strategy, new products, markets and partnerships. As a member of the board of directors, Konstantin is also responsible for corporate governance.