Jump to content

Bitcoin, Ethereum Finds Major Resistance – Levels to Consider


Recommended Posts

BITCOIN, ETHEREUM ANALYSIS:

  • Bitcoin’s bullish move at risk around zone of resistance
  • Ether (ETH) highlights potential range, conditional upon upside rejection
  • Crypto Fear and Greed Index offers insight into recent crowd psychology
TrueDigital Expands Distribution of Its Bitcoin and Ether OTC Reference  Rates - CoinDesk

BITCOIN GRINDS HIGHER BUT FACES HUGE LEVELS OF RESISTANCE

Bitcoin started the year in the same way it finished 2021, trending lower. Throughout January, BTC made lower lows and lower highs as a surging US dollar and hawkish Fed expectations weighed on the non-interest bearing asset. Additionally, the recent US – Russia tensions over Ukraine hasn’t helped risk assets, with bitcoin falling well within that category.

However, recent diplomatic efforts to calm the US-Russia tensions has provided a period of relief for risk assets as we have witnessed broad pullbacks in global equities and various JPY crosses (notably AUD/JPY, GBP/JPY). The situation, however, remains rather volatile and can change at any stage. Therefore, movements in BTC are expected to be news dependent and reactive in nature.

The recent uptick in bitcoin appears rather unconvincing, especially when comparing it to previous bullish moves that have produced greater momentum and volatility skewed to the upside. Looking at the chart, it becomes clear to see that BTC pivoted short of the major inflection point/zone around 29k/30k, meaning that a failure to break above the descending trendline - acting as support – opens the door to the 29k/30k retest. Additional resistance, should the breakout occur appears around the 41,500 to 42,500 zone. Therefore, the conditions around a sustained bullish move remain rather

Bitcoin (BTC) Daily Chart (Zoomed out to Highlight Major Zones)

Bitcoin, Ethereum Finds Major Resistance – Levels to Consider

Source: IG, prepared by Richard Snow

 

ETHER PIVOT COULD SIGNAL THE START OF POTENTIAL RANGE

Ether, like bitcoin has witnessed a calm move higher from the January low. The daily chart showed a cluster of consolidation around the 76.4% Fib at 2466 and now looks to test the 2930 level of support at the 61.8% Fib level. Failure to trade above 2930 could see another move back towards 2466. The breakout scenario, on the other hand, brings in the 3385 level as nearest resistance.

Ether (ETH) Daily Chart

Bitcoin, Ethereum Finds Major Resistance – Levels to Consider

Source: IG, prepared by Richard Snow

BEHAVIORAL FINANCE WITH THE FEAR AND GREED INDEX

The ups and downs of the psychology of trading is often amplified when trading volatile crypto markets and therefore, it is crucial to understand not only your personal strategy and emotions but also the emotions of the ‘crowd’.

Learn how to manage the emotions of trading

The Crypto Fear & Greed Index adopts a similar concept to CNN’s equity-related fear and greed index and tracks volatility, momentum, BTC’s performance vs alt coins and social media activity when determining the figure. This reading has been well within the fear segment of the reading which may present buying opportunities for value investors looking to secure lower dollar-cost-averaging within a wider portfolio of crypto assets. History shows us that periods of fear are followed by periods of greed however, the indicator provides no guidance on timing which is why the technical levels remain relevant.

Crypto Fear and Greed Index

Bitcoin, Ethereum Finds Major Resistance – Levels to Consider

Source: alternative.me, prepared by Richard Snow

 

Written by Richard Snow for DailyFX.com. 2nd Feb 2022

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • The recent controversy surrounding Kucoin executives reignites the debate on the regulation of centralized exchanges. Many argue that without proper oversight, preventing fraud on these platforms becomes exceedingly difficult. While some may resist government intervention, the persistence of fraudulent activities prompts us to question how long we can turn a blind eye. Despite reservations about figures like Gary Gensler, it's crucial to recognize the potential benefits of regulatory bodies like the SEC. The specter of another FTX-like incident looms large, with potential market ramifications given Kucoin's size. The recent sentencing of SBF, the former FTX founder, to 25 years in prison, serves as a stark reminder of the necessity for regulatory action to ensure long-term transparency and accountability. While decentralized exchanges offer an alternative, they are not without their own risks. This underscores the case for comprehensive regulation. However, recent events, such as the Nigerian government's request for user data from Binance, raise legitimate concerns about user privacy and governmental overreach. Can exchanges operate without incident for decades? Can we build a future where users feel genuinely confident and secure in their transactions? These are pressing questions that demand thoughtful consideration as we navigate the ever-evolving landscape of crypto exchanges.
    • I've developed an initial version of a market sentiment checker, which utilizes the concept of weighted log returns to gauge the mood of the financial markets. This tool is designed to simplify the complex task of assessing market sentiment by analyzing fluctuations in price data. By applying weights to log returns, it emphasizes the significance of certain data points over others, offering a more nuanced view of market dynamics. This approach allows for a fundamental analysis of market sentiment and provides insights into the current state of the market at any given moment. It serves as a valuable tool for investors and traders looking to make informed decisions based on the underlying sentiment driving market movements. sentiment-sleuth - Github Link
    • Demo account: Please note that conditions on demo accounts may differ from real accounts. Some brokers may only provide overnight loans on real accounts and not on demo accounts.
×
×
  • Create New...
us