Bitcoin started off the week on the backfoot after a recovery over the weekend proved fleeting. Strategists have cautioned that a break below the key $30,000 level could spell trouble.
Bitcoin has lost almost 50 per cent from its mid-April high amid questions about its energy consumption sparked by Tesla Inc.’s Elon Musk, as well as a clampdown from China. Even so, its value has nearly quadrupled over the past year.
“Bitcoin (BTC) set foot in familiar territory this week, with a weekend of solid gains that ended in a drawdown. The setting is complex and the ongoing miner migration and its implications on prices have confused many, leading to a fair deal of uncertainty,” ZebPay Trade Desk.
“The good news though is that fundamentals are finally showing signs of life and bulls may finally have something to celebrate. After the latest drop, mining is now a lot more economically attractive to many participants.”
Tech View by Giottus Cryptocurrency Exchange
Ethereum (ETH) is the second biggest cryptocurrency and dominates the altcoin market, with 18 per cent of the overall market capitalization. Along with Bitcoin (BTC), ETH’s price actions guide other altcoin prices. Over the past few weeks, ETH has been consolidating after dropping by almost $1,000 from its last (local) peak. On Monday, Ethereum continued the recovery it had been building over the weekend, breaking resistance at $2,263 with a new local high of near $2,400 in anticipation of its hugely significant EIP 1559 platform update coming later this month.
Currently, it seems to be making a rising wedge that has room to grow till $2,600 levels. Given the rising wedge symbolizes a bearish trend, ETH price movements right now might be a bull trap. Even though it may take some time for a rising wedge to break down, it is essential to note that currently, BTC is making a wedge and has room to move sideways. Therefore, the weekly closing will be critical in determining ETH’s future action. As ETH trades below its 30D EMA and 50D EMA, and its fib-retracement level of $2,288, some bearishness can be expected.
Support: $2,044, $1,940, $1870
Resistance: $2,250, $2,300, $2,440
(Views and recommendations given in this section are the analysts’ own and do not represent those of ETMarkets.com. Please consult your financial adviser before taking any position in the asset/s mentioned.)