Bitcoin and Ethereum plunge: Will the correction continue?
- The and ethereum have recently fallen.
- Bitcoin fell more than 5% to $28,500, while Ethereum fell 8% to $1,920.
- To confirm a rebound, bitcoin must stay above $28,750 and ethereum above $1,920.
On Wednesday, and other cryptocurrency markets saw a sudden drop, with bitcoin dropping more than 5% to $28,500 due to continued selling throughout the day. Bitcoin has been fluctuating around the $29,800 pivot level since the start of the week.
The cryptocurrency fell below this pivotal level after selling off the $30,300 band, leading to a negative zone in the second half of the week. BTC closed at $28,800 after yesterday’s selloff, but managed to stay above the first support price of $28,750, which coincides with the short-term uptrend that started after the consolidation period. .
Today, $28,750 is an important support point, and a drop below this level could trigger a decline towards the second support at $28,000. With the Stochastic RSI falling into the oversold zone in the daily outlook, buyers need to hold the cryptocurrency above $28,750 to see a possible recovery towards the first resistance level at $30,900 while limiting the downward momentum.
To confirm such a rebound, the first condition would be to see hourly closes above the 8-day EMA (29,500). According to the short-term price action, BTC price has been using the 8-EMA as momentum support for a long time, with rallies taking place above this average. Therefore, it would be wrong to talk about BTC entering bullish momentum until it starts trading above its 8-day average again. The second bullish signal is the reversal of the stochastic RSI index.
Looking at the bitcoin daily chart from another angle, the price of BTC has encountered resistance at an average of $28,750 for almost a month. It then broke through this resistance and entered the $30,000 area, encountering resistance at $30,500 on its way to $34,000, which we consider the next target area. Given the pullback over the past 24 hours, we can only speak of a retest of $28,750.
If bitcoin buyers manage to pass this test and defend the $28,750 support level, the bullish momentum could intensify and the cryptocurrency could head towards $34,000. Otherwise, bitcoin could fall back and consolidate around $27,000.
Ethereum resumes gains from last week
The pullback in crypto markets was felt most strongly in the altcoin market. quickly gave up last week’s gains with an 8% daily decline.
Ether slowed its decline at the first support price, dropping to the $1,920 band. With daily closes above $1,920, ETH could rally towards the $2,000-2,035 range, similar to bitcoin.
On the other hand, Ethereum is considered bearish as long as it stays below $2,000; hourly closes below $1,920 may trigger a move lower towards the second $1,840 support zone and then the main support level in the $1,700 band.
Disclosure : I’author does not own any of the mentioned titles.