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Bitcoin (BTC/USD) & Ethereum (ETH/USD) Have Entered the 'Erosion' Phase

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Bitcoin (BTC/USD) & Ethereum (ETH/USD) Have Entered the 'Erosion' Phase

Oct 13, 2022 | DailyFX
Paul Robinson, Strategist

BTC/USD, ETH/USD Technical Outlook:

  • BTC/USD, ETH/USD look completely broken as they enter the ‘erosion’ phase
  • Losses from here could be quite significant, with occasional sporadic moves

Cryptos appear to have entered the ‘erosion’ phase of the deflation process that happens once a bubble bursts. This comes after the initial waves of heavy selling take it down significantly and residual selling takes over. The price action is telling this story as it becomes increasingly less volatile and reactive to other risk trends.


With that in mind, sharp rallies and even very sharp sell-offs will become increasingly less frequent. Although the risk of an occasional large sporadic move is there. On a break of 17592 it is anticipated that selling could pick up in BTC, but don’t be surprised if it doesn’t result in a major rout but rather a slower, more methodical decline as people continue to throw in the towel.


Where BTC could end up is of course to be seen, but given the extent of losses seen following other manias, it would be unsurprising to see 95% or more of value erased, which means we could see 3500 or lower. The next level of support to watch is 13880, the 2019 high, then after that perhaps 10k. Support otherwise becomes hard to find until we get to the 2020 low, which happens to be around 3500.


Getting there will take some time, though, this won’t happen in weeks and not likely in a few months’ time. If BTC is indeed following the typical bubble unwind pattern it could take two years or longer.


BTC/USD Daily Chart


Chart  Description automatically generated

BTC/USD Chart by TradingView


ETH/USD has fared somewhat better, and it’s no surprise as there seems to be a larger contingency of market participants who believe more in the long-term efficacy of ETH than in BTC. With that said, however, it is still seen to suffer a similar fate as BTC. But perhaps if this thing is for real the final tally on losses won’t be as drastic. Levels to watch on the downside are 1k, then the June low at 880. After that, finding levels gets difficult.


ETH/USD Daily Chart


Chart, histogram  Description automatically generated

ETH/USD Chart by TradingView

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  • 4 weeks later...
17 hours ago, sebytaba said:

Do you think it will raise or even fall lower.

Bitcoin and Ethereum Technical Outlook: Have They Run Their Course?


Bitcoin and Ethereum Technical Outlook: Have They Run Their Course?

Nov 8, 2022 | DailyFX
Manish Jaradi, Strategist



  • Bitcoin is testing tough resistance, which in the past has led to a retreat.
  • Ethereum rally appears to be losing steam.
  • What is the outlook for BTC/USD and ETH/USD and the key levels to watch?


Bitcoin’s rebound has run into tough resistance, raising the risk of a retreat, or possibly a retest of the June low.

BTC/USD has maintained a gradual drift higher in recent weeks, nicely guided by an upward-sloping channel from September. The top end of the channel is an uptrend line (now at 21250) while the lower edge of the channel is another uptrend line (now at 18950). The top end also coincides with the 89-day moving average – the rebounds in August and September were capped by the moving average.

The two-steps-forward-one-step-back kind of recovery, similar to the corrections since mid-2022, means the current rebound is not any different from the previous dead-cat bounces. That is, those minor rallies were corrective, rather than a start of a new uptrend.

BTC/USD Daily Chart



Chart Created Using TradingView

For the downward pressure to fade, BTC/USD would need to rise above key converged resistance on the 200-day moving average (now at about 23770) and the August high of 25201. Until then, the path of least resistance is sideways to down. Interim resistance is at the September high of 22774.

From a half-glass-full perspective, the rise since September could well be part of the broader base-building process, typically classified by retests of the lows and fragile/choppy rebounds. In this regard, BTC/USD needs to hold above the June low of 17590 for the base-building view to remain intact. Immediate support is at Thursday’s low of 20040. Any break below the support would indicate that the short-term upward pressure had eased.



A negative momentum divergence (rising price associated with declining momentum) on the daily charts raises the odds that Ethereum’s recent rally may have run its course.

ETH/USD’s three-week-long rally is testing quite strong resistance on the 200-day moving average, not too far from another ceiling at the September high of 1790. Also, as noted in the previous update, ETH/USD has achieved the price objective of the horizontal channel that got triggered at the end of October.


ETH/USD Daily Chart



Chart Created Using TradingView

Any break below last week’s low of 1502 would trigger a minor double top (the October 29 and the November 6 highs), implying a potential fall towards 1350. However, there is strong support at the September-October lows of around 1193-1220.

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Thank's for the information. It is good to know these rates. Well, bitcoin has always been risky, and its whole concept can get you on the highest level one day and get you down the other day. In order to be successful in bitcoin and cryptocurrency, you need to be very patient and attentive. It is a matter of time, and you could have a lot of income from it. I hope the rates will not go down for some time, and we will be lucky to have some success these days. I am mining free bitcoin, and judging from this point of view, there are few chances of failure because you do not invest but mine for free.

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