Bitcoin Price Outlook: BTC, ETH Trade Flat After Bouncing Off Support

[MongiIG]

BITCOIN (BTC), ETHEREUM (ETH) FORECAST:

• Bitcoin prices (BTC/USD) stabilize after falling below the 20-day MA (moving average)
• Ethereum (ETH/USD) finds temporary support above $1,550 as bulls’ eye $1,600.
• Silvergate becomes the latest cryptocurrency firm to land in troubled waters. The digital-asset based bank falls victim to FTX contagion after announcing solvency concerns.

BITCOIN, ETHEREUM PRICES FIND TEMPORARY SUPPORT AFTER SILVERGATE SLIDE

Bitcoin and Ethereum prices have stabilized after Friday’s plunge that occurred on rising fears over crypto-based bank, Silvergate. After announcing a 40% reduction in its workforce, the firm announced a “risk-based” decision to discontinue its Exchange Network.

As Coinbase, Galaxy Digital and Bitstamp reacted to the viability concerns by suspending payments and withdrawals through the Silvergate payment network, major crypto's plunged before finding support at key technical levels.

The combination of negative sentiment and rising rate expectations weighed on digital assets, pushing BTC below $20-day MA (moving average) now holding as resistance around $23,600. With prices extending declines into the weekend, a rebound off the $22,000 psychological level helped limit losses.

As the largest digital asset (in terms of market capitalization) returned to a narrow range of support and resistance, Ethereum dropped below $1,600 before finding support at $1,550.

BITCOIN (BTC/USD) TECHNICAL ANALYSIS

While today’s price action has remained subdued, the recent decline has driven the CCI (commodity channel index) into oversold territory. With Bitcoin prices currently trading sideways around the $22,500 mark, a break of $22,000 could make BTC/USD vulnerable to a sharper pullback.

Bitcoin (BTC/USD) Daily Chart

Chart prepared by Tammy Da Costa using TradingView

Below this level is the February low which could open the door for bearish continuation toward $20.000.

ETHEREUM (ETH/USD) TECHNICAL ANALYSIS

As Ethereum rises above another big spot of support at $1,550, the next barrier of resistance has formed at $1,600 which could pave the way for a move toward the 50-day MA (moving average) at $1,610.

Ethereum (ETH/USD) Daily Chart

Chart prepared by Tammy Da Costa using TradingView

 

 

Written by Tammy Da Costa, Analyst for DailyFX.com