Welcome to this week’s market activity analysis.
It is possible you might have been disappointed by the lack of Bullish market moves, as the bearish pressure has taken market dominance with Bitcoin dropping a whopping $800 in 3 minutes on Friday night to close at $9300. The good news is that the bulls are ready to bounce back as we observed bearish exhaustion on the charts.
Ethereum appears to be on perfect correlation with bitcoin, gaining and losing with every bitcoin activity.
This week bitcoin saw a bit of Weakening as Bitcoin now hovers between $9400-$9500. And within the week the prices hit a high of $10,651 with its lowest at $9300. The drastic shortfall in trading volume in every 24-hour (estimate 75% shortfall) indicates a very low demand situation.
The major fundamentals analysis for Bitcoin was a statement from the co-founder of Morgan Creek Digital Assets, Anthony Pompliano stating that the European Central Bank (ECB)’s expected dovish turn will be “rocket fuel” for Bitcoin.
From the technical standpoint, on the daily time frame, Bitcoin hit a major demand zone at $9500 and is currently stabilizing at that zone. We expect a bullish reaction at the zone for the uptrend to resume. On the other hand, if the bearish pressure intensifies and price slips beyond this zone, we should be looking at $7500 for a bullish overturn.
Ethereum has been a clear correlation with the price of Bitcoin, making gains and loses with Bitcoin and the charts of the two coins appear similar in structure. Ethereum price appears to be showing more bearish signs throughout the noticeable short term consolidation phase that has taken place over the past few weeks. Although the overall trend still remains Bullish, the major question on the minds of all traders is “for how long?”
The technical analysis on a four-hour chart we can observe a clear consolidation after the most recent strong sell-off. The 24-hour daily trading volume of Ethereum is very much descending which is also a strong indicator of the absence of demand (bulls). The current price is trading around $207 and the price has remained stable at $200 and looks more likely for the weekly candle to close above $200 for this week.
This $200 mark hit a strong demand zone and we expect the price to rally upwards. But before we trade, it is advised for us to expect bullish exhaustion in the form of divergence before we go bullish.