Bitcoin (BTC) and Ether (ETH) are finally correcting after more than a month of bullish rally. A healthy correction to better break his range or is it still the start of a steep decline? The point in the analysis of the week.
Bitcoin (BTC) declined at the top of its range
As discussed in our previous technical analysis, Bitcoin (BTC) price finally hit its high range around $24,300. Now, in light of a news background that does not help to continue the rise in the short term, and especially the cryptocurrencies threatened by the SEC in the United States, cryptocurrencies are correcting and starting to fall again.
It must be said that many investors in the crypto market expected this fall, which will have taken off in a straight line for more than a month, which will make the hope of buying Bitcoin below the dollar 15,000. narrow down. So the current correction is an opportunity for some to step in after a fall of +11% in one week.
Figure 1 – Bitcoin daily price chart
So is this the end of this crypto bull rally? Apparently not. In fact the objective determined by the chart pattern in yellow (Drooping Wedge) is still around 26,735 dollars (the height of the triangle at its entry, reported to where it breaks) and will remain active as long as the price remains at above the low. of the range at $19,000.
Generally, this type of pattern gives good probabilities for the price to reach its target. In theory, then, it seems quite logical that Bitcoin bounces off the key areas determined by the Fibonacci above. BTC is likely to continue falling towards the 0.5 Fibo at $20,000 or even the 0.618 at $19,145. In fact these levels are the ones most often taken into account during a correction and therefore are the best.
As long as the price bounces from one of these levels, this correction will remain healthy and will most likely allow BTC to make a further breakthrough towards the target at $26,735., the remaining price with cloud support and many supports. On the other hand, if it goes back below the 0.618 Fibonacci, then there will be a risk of breaking the range again from below because the probabilities will be strong to witness a 100% rise for January towards 16. $600.
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Ether (ETH) Follows Bitcoin and Plunges
It is the same on the course of Ether (ETH) where the price has been falling for several days. It looks like it is heading towards the middle of the range, which will be essential to hold as a support in order to hope to break this large rectangle from the top with the objective at $2,608 determined by the triangle in yellow .. After the mid-range zone has become a resistance several times, it could be quite logical that it now acts as a support to allow the price to go back.
Figure 2 – Ether price chart (Daily)
The levels that the price could rely on are located at $1,433 (0.5 Fibo) or even $1,372 (0.618). If these levels do not allow the price to break away, then they will enter resistance and result in 100% of the January high, with a very likely price return to $1,200.
The coming days will therefore be decisive for Ether as well, which must find enough liquidity to break its range and resistance at $2,000 from above.
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The conclusion of this technical analysis
Bitcoin and ether still fail to break their range from above. The current correction is an important test that will allow us to find out whether cryptocurrencies can calmly recover when they break out of their range, or whether they will have to undergo further corrections in the coming weeks to recover enough liquidity.
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