A practicing trader and founder of the project Crypto Shaman Vadim Shovkun explains the current market situation.
Since the previous overview, Bitcoin’s price has moved into a flat range, with little change. Ethereum, as was expected, rose. It is worth reassessing the outlook for these two assets.
Bitcoin
Prices are wedged between $19,500 and $20,800. The price still cannot anchor itself in the high-volume zone (highlighted in yellow). A large number of trades yields no reaction, which is a worrying signal.
Currently, quotes have gained only 17% from the local minimum. For comparison: in 2020, during the March dump, when volumes were also very high, the asset rose by 50% in nine days.
Take note of Bitcoin’s weak position relative to the S&P 500. Since the start of the month the index has fallen 12%, but that didn’t stop it from retracing more than half of the drop last week. This shows classic weakness: SPX up — price of the first cryptocurrency doesn’t move; SPX down — the price of digital gold declines.
The longer Bitcoin remains in a tight range, the higher the risk of a drop from current levels. On higher timeframes (three-day and hourly), the downward impulse is very strong, making an inertial decline highly likely. Since the bounce was quite weak, the price could well approach the $17,000 level.
While Bitcoin remains within the range, trading should be done from edge to edge. Observations point to a higher likelihood of a drop, so short positions are in the lead.
Ethereum
Ethereum looks stronger than Bitcoin and sits at the upper boundary of its range.
If the price enters the red zone and returns to current levels, the classic pattern UT will appear. This is a strong argument in favor of a decline.
Otherwise, the same arguments apply as for Bitcoin. At the very least, when the price of digital gold starts to fall, Ethereum prices will follow.
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