The central theses
- Bitcoin and Ethereum are consolidating ahead of their next major price move.
- Clear levels of support and resistance have been identified to anticipate an outbreak.
- Because of the ambiguity of the market, patience is crucial for investors.
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The top two cryptocurrencies by market cap, Bitcoin and Ethereum, are stagnating with no clear indication of where they’re going next.
Bitcoin and Ethereum are very limited
Bitcoin continues to consolidate as its price action tightens over time.
The flagship cryptocurrency has made a series of lower lows and lower highs since last week’s flash crash. Drawing a trend line through these pivots results in a falling wedge pattern. The y-axis of this technical formation predicts a target of 6% in either direction.
A crucial hourly candle close above $ 44,900 could push it up towards $ 47,630, while a downturn below $ 44,000 could trigger a sell-off towards $ 41,330.
Ethereum also offers an ambiguous outlook as its price movement was contained in a descending parallel channel over the past week.
Whenever ETH reaches the upper bound of this technical formation, it is rejected and goes back to the lower edge of the pattern. From that point on, it tends to rebound, which is consistent with the characteristics of a parallel channel.
Ethereum recently fell to the middle trendline of the channel and has yet to rebound to the upper trendline or fall to the lower trendline.
A breach of the $ 3,330 resistance would likely result in a bullish impulse to $ 3,660, while a dip below the $ 3,000 support could cause ETH to drop to $ 2,730.
Given the ambiguity that both Bitcoin and Ethereum exhibit, it is imperative to wait for confirmation before entering a long or short position. Patience can play a crucial role in capitalizing on the next major price move from BTC and ETH.
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