Bitcoin, BTC/USD, Ethereum, ETH/USD Outlook:
- Bitcoin attempting a breakout of a bullish flag pattern.
- There is a risk of a possible head-and-shoulders reversal ETH/U.S. dollar.
- What is the outlook and what are the key levels to watch?
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Cryptocurrencies surged after a U.S. judge ruled Thursday that Ripple Labs Inc. did not violate federal securities laws by selling its XRP token on public exchanges. Technical charts suggest that Bitcoin and Ethereum could be preparing for another surge.
BTC/USD daily chart
Chart created by Manish Jaradi using TradingView
BTC/USD has recovered from a near-large buffer at the 200-day moving average, coinciding with the bottom of a rising channel from early 2023. This coupled with the subsequent rise above minor resistance at the May high of 28460 has confirmed the downtrend. The pressure has eased increasing the chances for more gains.
BTC/USD daily chart
Chart created by Manish Jaradi using TradingView; See the notes below
As the color-coded daily candlestick chart shows, the April-May decline was a consolidation within the broader bullish phase.
Recently, BTC/USD has been consolidating in a flag pattern. Any break above the current range could pave the way to the top of the channel (now around 34,800). Importantly, such a break would entail a break above a key hurdle at the top of the weekly chart’s Ichimoku Cloud for the first time since 2022 – a key bullish signal.
On the upside, BTC/USD needs to stay above the 200-day moving average (now around 25600) for the upward pressure to remain intact.
BTC/USD weekly chart
Chart created by Manish Jaradi using TradingView
ETHEREUM: A head and shoulders reversal could be brewing
On the technical charts, ETH/USD bounced off strong convergent support at the 200-day moving average last month and coincided with the top of a rising trendline from late 2022. Holding above the main moving average is an important sign that it remains intact in the medium-term uptrend. Check out the previous update highlighting the importance: “Bitcoin and Ethereum Slip as Fed Signals Higher Rates: BTC/USD and ETH/USD Price Hides,” published on June 15th.
ETH/USD daily chart
Chart created by Manish Jaradi using TradingView; See the notes below
From a trend perspective, the broad bias remains bullish for ETH/USD as indicated by the color-coded daily candlestick charts.
ETH/USD daily chart
Chart created by Manish Jaradi using TradingView
She is now trying to overcome an important barrier between 1975 and 2000. Such a break would trigger a minor inverted head and shoulders pattern (left shoulder is at the May low, head is at the June low, and right shoulder is at the early July low), possibly paving the way towards 2250 levels pattern price target.
Note: The color-coded charts above are based on trend/momentum indicators to minimize subjective bias in trend identification. It is an attempt to separate bullish, bearish and consolidation within a trend from a trend reversal. Blue candles represent a bullish phase. Red candles represent a bearish phase. Gray candles serve as periods of consolidation (within an up or down phase), but sometimes they tend to form at the end of a trend. Candlestick colors are not predictive – they merely indicate what the current trend is. In fact, the candle color may change in the next bar. False patterns can appear around the 200-period moving average or around support/resistance and/or in a sideways/choppy market. The author assumes no liability for the correctness of the information. Past performance is not indicative of future performance. Use of the information is at your own risk.
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— Written by Manish Jaradi, Strategist for DailyFX.com
— Contact and follow Jaradi on Twitter: @JaradiManish
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