CURRENT BTC AND ETH ANALYSIS
When stock prices of companies surge, just by adding the word ‘cryptocurrency’ or ‘Bitcoin’ to their name or by announcing entry into the Blockchain technology or sometimes by pure speculation, it is a sign that things are getting out of hand.
During such times, short sellers like Andrew Left, founder at Citron Research look at strategies that will help them to benefit from the fall.
Similarly, we believe that with the sharp rise in Bitcoin in 2017, a few short sellers will be salivating to short in the futures market once the upside momentum wanes.
However, will it lead to long liquidation or will the short sellers be forced to cover leading to a squeeze is difficult to predict.
Another thing of interest will be to see whether the altcoins hold out or are dragged down along with the leader.
Let’s try to find it out.
BTC/USD
In our previous analysis, we had warned the readers about a likely increase in volatility. We had also advised trading with stops because the cryptocurrency was at a risk of a deeper correction if it were to break below the critical support.
The cryptocurrency has broken down of the uptrend line. This confirms a break in the momentum. Today, Bitcoin came close to its critical support of $15,200 and bounced from there.
Now, the rebound will face resistance at the trendline, which previously had acted as a strong support. If the price fails to rise above the trendline, chances are that it will break down of $15,200.
The lower targets are $12,505 and then $10,760 which is the 50-day SMA support. The negative divergence on the RSI also points to a likely fall in Bitcoin.
Our bearish view will be invalidated if Bitcoin climbs back above the trendline.
ETH/USD
We had hinted that the bulls were attempting to breakout above the lifetime highs. On Dec. 18, Ethereum reached a new lifetime high.
However, the highs did not fix as profit booking and selling forced the cryptocurrency back below $780.
The support exists from the trendline. If this level breaks, we can expect deeper fall. On the other hand, if the digital currency moves above $800, it will rally towards its target objective of $995.99.
Contrarily, if the bears push Ethereum back from the highs, it is likely to consolidate between $610.03 on the downside or $780 on the upside.