Bitcoin, Ethereum Hold Onto Support - But for How Long?
Investing.com | Jun 13, 2023 02:30
- The crypto market is again under pressure ahead of a critical week
- Bitcoin, Ethereum need to hold onto support levels
- Or else, selloff risks will continue to persist
Cryptocurrency markets are currently facing headwinds, and as a result, the altcoin market is being put to the test.
Last week, the altcoin market sold off, especially in cryptocurrencies considered securities, due to the SEC's actions against crypto exchanges. This week, the release of inflation data and the subsequent interest rate decision by the Fed will greatly impact the crypto markets.
Investors are closely watching the Ripple-SEC case. The SEC has a deadline of June 13 to disclose the Hinman documents, determining whether Ethereum is a security.
Market perception suggests that these documents indirectly affect altcoins that the SEC considers securities.
Despite the negative sentiment, uncertainty has also reduced investors' willingness to take risks.
Against this backdrop, there was a downward trend in Bitcoin and Ethereum last week, but the selling pressure wasn't as intense as in the rest of the altcoin market.
h2 Bitcoin Tries to Hold Support/h2Bitcoin faced difficulties maintaining the support level at $26,500 mentioned previously. However, during the weekend's substantial selloff, Bitcoin could not maintain it.
After breaking out of the symmetrical triangle pattern, BTC declined toward the second support level at $25,300.
Last week, Bitcoin tested the $25,300 support. However, there was an increase in buying activity at this level, indicating that it acted as a demand zone during the weekend selloff.
It is crucial for Bitcoin to protect the $25,300 price level to avoid further losses. If another wave of selling occurs, Bitcoin may potentially fall to $24,000 and then $22,350.
On the daily chart, the exponential moving averages are on the verge of a negative breakout, and the Stochastic RSI indicates a potential continuation of the decline toward oversold territory.
However, in the cryptocurrency market, where things can change very quickly, strong buying pressure could reverse this negative sentiment.
A recovery in the altcoin market would serve as a catalyst to disperse the prevailing negative sentiment across the market.
In terms of important levels, surpassing $26,500 is key. Furthermore, a daily close above $27,100 would trigger further upward momentum.
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In summary, the breakout direction from the $25,300 - $26,500 range will likely dictate the next move for Bitcoin.
h2 Ethereum's Downside Breakout/h2After reaching the price compression threshold last week, Ethereum broke downward after the SEC news. In the first wave of selling, Ethereum maintained its $1,800 support and stayed above its 3-month EMA.
In the second wave of selling over the weekend, Ethereum moved below this critical support and retreated to the $1,750 level.
Currently, the closest support zone for ETH is $1,750. In a downward breakout, $1,660 may be a second support point. If this support is breached, the next downside target for Ethereum is $1,535.
In the bullish scenario, ETH must establish a floor above $1,845 in the short term, with ETH continuing daily closes above $1,750. If this materializes, $1,950 may be the next target zone.
In summary, while the outlook for Ethereum remains negative, increased selling pressure risks are likely unless it gains ground above $1,845.
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