Important price levels for Bitcoin and Ethereum
Above: Bitcoin (BTC) chart
Bitcoin’s card has been a source of frustration for both bulls and bears. Bears thought they had a fantastic brief opportunity (which it was) when Bitcoin fell below the rising wedge. Bulls thought they had a fantastic opportunity when Bitcoin returned to the rising wedge. The bulls then felt trapped as the price fell back below the rising wedge. Now the shorts are frustrated as the fall below the rising wedge did not result in a sustained sell-off for the second time. Instead, Bitcoin retains a value in the mid to high 50,000 value range. The current daily candlestick shows that Bitcoin is trading between the daily Tenkan-Sen and Kijun-Sen. Personally, I will continue to expand Bitcoin as usual (average cost in US dollars) – but I see many strong levels of support and resistance ahead of me to keep any trade at that level. I need to see a distinct interruption higher than a new all-time high, or an interruption and sustained movement below the 50,000 range.
Above: Ethereum (ETH) diagram
Ethereum had a damn bearish close yesterday with a massive high volume bearish candlestick. Ethereum made up some of the losses yesterday and was only a hair above the daily Tenkan-Sen. If we look at today’s candlestick, we see that Ethereum forms an inner bar. Inside bar patterns are some of the most sought after candlestick patterns because they offer so many trading opportunities – especially when an instrument is trading at or near a major high / low. This means we have to wait for the daily candlestick to close to form a trading idea – but we can make some assumptions. First, the inside bar must have a high below the previous candlestick high and a low higher than the previous candlestick low – in other words, all of today’s price action must be within yesterday’s trading range. If this daily candle holder is closed as an inner bar, a purchase stop can be placed above the high of the inner bar. On the short side of the market, you would use the ‘mother rod’ (bearish devouring candle holder) to establish a sales stop below the low of the devouring candle holder. But on the short side, I would be careful. There is an excellent level of support around the 1825 range where the daily kijun-sen and high volume knot appear. This could be a good zone to consider falling – but watch the market carefully move forward. It’s spring time and as we move into summer and more countries start opening up, expect volume (as it naturally does in summer) to decrease and volatility to increase.
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