- Bitcoin has been continuously rejected at the $23,000 level
- Ethereum has become more volatile since the second half of January, reflecting a price squeeze
- Bitcoin could correct in the short term while Ethereum remains at a crossroads
Bitcoin (BTC) Struggles to Break Above $23,000
Over the past week, attacks on the $23,000 level have been met with selling, while in the lower region, demand remains alive in the $22,600 band.
The outlook remains positive. Accordingly, if the bitcoin bulls launch a new attack after a week of accumulation, BTC may move toward $23,600 and then $24,700 in the coming days. Daily closes above $23,150 can trigger BTC to continue on its way.
When measuring the November downtrend, we mentioned that the $22,800 – $24,700 area had become important as a Fibonacci expansion zone.
A break of this critical resistance this week could open the door to $30,000. At $24,700, BTC found resistance last summer, so this area is more challenging to overcome.
As seen on the daily chart, bitcoin’s 38.5% rise in January has allowed the short and medium-term EMAs to return to an ideal bullish outlook.
Looking at the Bitcoin chart in terms of exponential moving averages, we can see that the 8-day EMA is dynamic support for BTC at an average of $22,500.
A daily close below this level could signal the start of a correction from the recent uptrend, and BTC could quickly move toward the next support area in the $21,000 – $21,300 range.
A drop to this area could be considered a partial correction, and a break below $21,000 could accelerate losses. Finally, looking at the Stochastic RSI on the daily chart, we can see that the indicator has turned bearish while the Bitcoin price remains stable.
This means that the possibility of losses on a daily close below the $22,500 level should not be ignored. Otherwise, if the BTC price can break out of the narrow band, the Stochastic RSI will also turn up and support the rise.
Ethereum Price Compression Signals Breakout
fell as low as $1,500 on Jan 19 and then rose as high as $1,680 after bulls used the former as a buying opportunity. As the week progressed, the price saw lower highs and higher lows. This resulted in a price squeeze.
According to this outlook, Ethereum may rally and try to break through the symmetrical triangle that has formed in the short term. Trading in the $1,570 area today, Ethereum is testing the bottom line of the triangle.
In case of a daily close below this level, the bearish momentum could accelerate, and the cryptocurrency could quickly move toward the $1,500 and $1,400 bands.
On the other hand, if we see a fresh wave of demand towards the $1,600 band in weekend trading, we could see the upward momentum continue toward the Fibonacci expansion zone limit at $1,760.
The last week of October and the first week of November saw a similar movement at these levels. At that time, Ethereum had broken the short-term triangle pattern to the upside.
The FTX crisis disrupted the outlook and caused the cryptocurrency to move sharply lower with the rest of the market. In summary, Ethereum has signaled that it is in a decisive phase for the next 24 hours.
Disclosure: The author doesn’t own any of the securities mentioned.