If you trade Bitcoin or Ethereum, keep an eye out for these levels.

Spread the love

 124 Interactions,  2 today

Bitcoin and Ethereum are the two most valuable cryptocurrencies (in terms of market capitalisation), and their movements have an impact on the whole crypto-market. Naturally, their increase and fall has an effect on the pricing of all altcoins. Given the current market conditions and the continual volatility, it is vital to identify the critical levels for these two coins.

Popular analyst Rekt Capital was the latest to speculate on what these levels might be. However, it’s best that these levels are looked at in the context of a few select metrics.

Bitcoin, Ethereum – All the same?

The price movements of both cryptocurrencies suggest that they are in a similar position. For the most part of this year, Bitcoin has remained above the 6-month long upper low (black) line. This sentence was critical to the king coin’s success. However, with the previous week’s close, this support was transformed into resistance, and this week’s price movement remained red under the line until the time of this report.

Bitcoin higher low and 50 WEMA | Source: Rekt Capital

Since this upper low has been broken, the 50 WEMA (blue) line has become extremely important. If the cryptocurrency continues to trade below it, the market for Bitcoin will stay quite negative. Furthermore, the king coin will find it difficult to regain the higher low as support. Furthermore, the continuous downward wedging structure that Bitcoin has concentrated in since the May crisis is a major source of concern.

RECOMMENDED READ:  Why Mark Cuban admires Ethereum network

Having said that, BTC’s movement has been oscillating about its mid-line for the previous two weeks. If this trend continues, it is possible that a prolonged and substantial breakdown on the charts will be rare. This, perhaps, might be the motivation needed for Bitcoin to reclaim the higher low.

Ethereum isn’t moving any faster either. The popular cryptocurrency has also been trading around its upper bottom, with the formation of a downward wedge on the weekly chart creating worries. Even if the upper low is breached and held, the lower trend line will provide significant support for ETH.

At the time of publication, for example, ETH had gone below $2,000 once more. The bottom trend line, on the other hand, was still holding firm.

Ethereum higher low and downward wedge | Source: Rekt Capital

Another crucial level, in this case, the 20 EMA line, which is aligned with the upper low trend line, has previously functioned as a vital support level for the price of the world’s largest cryptocurrency.

RECOMMENDED READ:  Bitcoin Miners Saw 48% Revenue Increase in November

What do the metrics say?

Metrics are now showing a negative trend. Spot trading volumes have been low since the May collapse, but the trend has worsened as of this writing. The index plummeted to a four-month low compared to its pre-May levels, which is not a healthy indication. Furthermore, both the MVRV ratio and market mood did not appear to be favourable.

The MVRV had a relatively low profitability at the time of publication. Furthermore, market mood was not in excellent shape, with positive sentiment falling to very low levels.

Ethereum spot trades consistently falling | Source: Glassnode – AMBCrypto

Ethereum MVRV ratio and Positive sentiment | Source: Santiment – AMBCrypto

Taking these considerations into account, it appears that ETH might go lower down the charts. However, as previously said, no one can forecast market volatility. Investors should maintain a close eye on the price activity since the only wise investment is a thoughtful investment.

Leave a Reply

Contact Us