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June 28, 2020

Weekly Recap: Bitcoin (BTC) Awaits Decisive Breakout, Ethereum (ETH) Tests Key Support Level

By Konstantin Anissimov
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The pioneer cryptocurrency had another rough week. Its price was able to surge over 5% after the weekly open, rising from a low of $9,300 to a high of $9,800. But as the week progressed, Bitcoin pared all gains incurred to end 1.44% lower on Friday.

On June 24th alone, BTC took a 4.4% nosedive to reach a low of $9,210. A few hours before Wednesday’s close, however, it surged by 1% and ended the day at $9,310. The bears continued to have full control over prices on the next day, which saw Bitcoin erase $250 of its value within one hour.

Indeed, the flagship cryptocurrency went as low as $9,010 on June 25th, but investors appear to have enjoyed the low prices to get back into the market. As the buying pressure increased, Bitcoin was able to close Thursday at $9,260.

Friday, June 26th, also saw downward price action since BTC dropped to a low of $9,055 during the first half of the day. But after 15:00 UTC, the bulls stepped in and its price rose by 1.3% to close at $9,170.

Despite the growing selling pressure, Bitcoin remains contained within an ascending triangle on its 1-day chart. The hypotenuse of this pattern, as well as the 23.6% Fibonacci retracement level at $8,900 (measured from March 13th low of $3,620 to June 1st high of $10,500), are currently providing strong support.

Moving past this critical area could trigger an 18.5% downswing that sends Bitcoin to $7,700 or lower. Meanwhile, a spike in demand around the current price levels that allows BTC to bounce off this barrier may see it rise towards $10,000.

Ethereum holds above key support for another week

Like Bitcoin, Ethereum also kicked off the week on the right foot. After Monday’s open, June 22nd, the smart contracts giant surged nearly 8.5% to a high of $247. But only a few hours before the day’s close, it dropped by 1.5% to end at $243.4.

Monday’s upward price action did not spill over into the next day as Ether remained stagnant. Its price mostly traded between $245 and $242, and closed June 23rd at $243.50.

Nonetheless, volatility struck back on June 24th, resulting in one of the wildest price movements of the week. Ethereum rose by nearly 3% to a high of $250, but this resistance barrier was able to hold. The rejection caused Ether to plummet by 6.20% and close Wednesday at $234.80.

The following two days of the week were also characterized by a downtrend that made Ethereum close Friday, June 26th, 0.70% higher than the weekly open at $230.

While the $225 support level continues to hold, it is becoming weaker over time. Investors must pay close attention to this area of support because an increase in sell orders might allow Ether to break below it. If this were to happen, the second-largest cryptocurrency by market cap could plunge to $200.

High volatility is underway

June 22nd and June 24th were quite significant days for Bitcoin and Ethereum. Their prices were able to rise at the beginning of the week, but then the bears took control of the price action. Regardless of the volatility, these cryptocurrencies did not provide a clear sign of what the future holds from a macro-perspective.

For this reason, investors must remain patient waiting for Bitcoin to break the $8,900 support or the $10,000 resistance level. A daily candlestick close below or above this area will determine where BTC is headed next. For Ethereum, the critical area to watch for is defined by the $225 support and the $250 resistance level.


Konstantin Anissimov, executive director at CEX.IO

 
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