Capitulation Threatens Bitcoin and Ethereum
Bitcoin and Ethereum are continue on the decline, as concerns about the global macroeconomic climate grow. As both cryptocurrencies look to have breached critical demand zones, losses may accelerate.
Bitcoin and Ethereum are in jeopardy
Over the weekend, the cryptocurrency market lost over $110 billion, placing Bitcoin and Ethereum in a precarious position.
Over the last four days, the number one cryptocurrency has dropped 15.5 percent, from a high of $39,850 to a low of $36,665. Bitcoin was able to slash through a major region of support during the downturn. Bitcoin may be headed for additional losses as selling pressure appears to be increasing.
Bitcoin has sliced through the lower boundary of a parallel channel on its daily chart from a technical standpoint
As a result of this market behavior, a severe correction as large as the pattern’s width is expected, with a target between $29,620 and $28,060. Nonetheless, the Jan. 25 low of $32,850 could act as a support zone, and only a sustained violation of this level would confirm the bearish outlook.
About the last four days, the price of Ethereum has dropped by nearly 15.5 percent, losing over 500 points in market value. The second-largest cryptocurrency by market capitalization is currently trading above the critical $2,500 support level. Significant losses can arise with a three-day close below this demand region.
On Ethereum’s three-day chart, a symmetrical triangle suggests that a breach of the $2,500 support level might result in a 64.7 percent drop. The first sign of confirmation for the gloomy outlook might be a breach of the 78.6 percent Fibonacci retracement line at $2,150. Then, before a capitulation near the $900 level, Ethereum might stay around $1,720.
The current technical conditions indicate that Bitcoin and Ethereum may experience significant price drops. The negative thesis may be refuted, however, due to the high volatility in the bitcoin market.
For a chance to achieve greater highs, Bitcoin would have to recapture $38,000, while Ethereum would have to cut through the $3,270 resistance level to record a positive breakthrough.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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