Cryptocurrency strategist Ali Martinez is issuing a caution on Bitcoin (BTC) after spotting a bearish divergence on two key metrics.
In a new post, Martinez tells his 32,700 followers on the X social media platform that the price of Bitcoin is climbing while the growth of the network is slowing down.
[adinserter block="1"]According to Martinez, the divergence between Bitcoin’s network growth and price is a “red flag”.
“It suggests the uptrend might not have enough momentum to sustain.
This bearish divergence between BTC price and network growth is an on-chain sell signal traders should be aware of.”
The cryptocurrency strategist says that the key levels to watch if Bitcoin turns downwards are at $34,300 and $30,200 where critical demand for BTC exists.
Bitcoin is trading at $36,173 at time of writing.
Turning to Ethereum (ETH), Martinez says that the second-largest crypto asset by market cap could turn bearish based on the readings of the Tom Demark (TD) Sequential indicator on the 3-day chart. The TD Sequential is used to identify key inflection points in the markets.
According to Martinez, the key level for Ethereum is in the $2,000 to $2,150 resistance zone as it forms an ascending triangle pattern on the 3-day chart. Ascending triangle patterns are typically considered bullish.
“A pullback from this resistance level [$2,000 – $2,150 resistance zone] could lead to a dip toward the [ascending] triangle’s hypotenuse at $1,700, setting the stage for a potential uptrend continuation.
Keep an eye on the crucial $2,150 level – a sustained 3-day candlestick close above this could negate the bearish outlook.”
Ethereum is trading at $2,010 at time of writing.
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