Bitcoin Analysis for the week.
Last week showed an increase in volatility for BTC as it plummeted from $36K to $29K within the first 3 days of the week. However, the losses were considerably regained in the last half of the week. With BTC trading around the $35k level this week, traders need to be aware of two important levels; the $41k level marked by the upper bound of the rectangle and the $28k level marked by the lower bound of the rectangle. A clear direction of BTC can only be determined after a break and retest of either of the levels. In the meantime, spot traders have the opportunity to pick intraday trades that have less regard for the long-term directional bias. The levels are marked in the chart below;
image from mt5
China’s crackdown on BTC mining in the country is the most attributed cause of this BTC drop. According to strategists from JP Morgan, BTC still has a bearish directional bias. The 8% drop that happened last Friday’s night was triggered by the expiry of options worth roughly $6 billion. Other technical analysts argue that BTC has been showing a Wyckoff pattern since the start of 2021, and this may be presenting a bullish opportunity.
A break and retest of the $41k level will signal a high probability bullish directional bias while a break and retest of the $28k level will signal a high probability bearish directional bias. These are the most important levels that every BTC trader should be watching this week.
Ethereum analysis for the week.
Following the recent weeks’ plunge, Ethereum seems to be finding support above the $1800 level. The support region starts from $1381 – $1829. Given that price remains above this level, traders can take short-term buy opportunities targeting the $2947 level. A break and retest above the $2947 level would mean that price is ended for the previous high, which is at the $4290 key level. Alternatively, a close below the $1381 level would expose Ethereum to a further plunge towards the $710 level. See the chart below;
image from mt5
For this week, these are the levels that everyone who is trading Ethereum should be aware of.