The Federal Reserve is once again the main threat facing cryptocurrency traders following the most turbulent moment in the aftermath of Sam Bankman-Fried FTX’s exchange has ended. Since Fed Chair Jerome Powell and other senior officials hinted last week that the tough pressure would persist far beyond 2023, the U.S. central bank’s effort to stifle surging inflation by tightening monetary conditions is once again on the minds of cryptocurrency traders.
Bitcoin(BTC)– The price broke through two key supports, $16,825 and the ascending trendlines for an inverted flag formation, on December 16. The market’s continued selling pressure is heightened by the loss of this support, indicating that future support may see larger corrections for the BTC price.
The crypto market has seen significant selling in recent days as a result of recent uncertainties surrounding Binance, the crypto exchange, and expectations that the US Federal Reserve may increase interest rates.
As a consequence, the price of Bitcoin decreased by 6.5% over the course of the previous four days and is now trading at $16,696. However, this decline crossed the support trendline of an inverted flag, a bearish continuation pattern. Theoretically, after offering a slight pullback on the upside, this bearish pattern intensifies the selling pressure in the market.
As a result, on December 16th, a lengthy red candle pierced the support trendline, signalling that the bearish momentum had been renewed. The BTC price is currently 0.5% lower as it tries to recover from the support failure. Thus, if the selling pressure continues, the price of Bitcoin might decline 6.5% to reach the $15,600 support level. Buyers would attempt to struggle for trend control at the $16,125 level, a crucial key factor in-between support level.
The strength in price behaviour is shown in the RSI indicator, which measures the speed and magnitude of the coin’s most recent price. As a result of the current dip, the RSI sloping down below the neutral line, and the 14-SMA overall reflects the market’s rising underlying bearishness. The fact that the coin price has moved beneath the indicator’s midline suggests that sellers are in charge of the current price movement.
Ethereum(ETH)– The Ethereum price is headed for a severe drop after losing two critical supports, the ascending trendline and $1,220. A little retracement to the $1,220 flipped barrier should revive the selling momentum, despite the fact that the local support of $1,160 has temporarily stopped additional losses. How much of a drop in the price of ETH may result from this?
A rising wedge pattern was formed during the most recent recovery cycle of the price of Ethereum. Theoretically, the bullish momentum is gradually fading as seen by price action that resonates between two converging trendlines.
As a result of the effect of this bearish pattern and the current sell-off in the crypto market, the ETH price has seen a huge outflow. Additionally, the coin price has dropped 10.8% in the previous five days and is presently trading at $1,177.
This downturn resulted in a significant breach of the $1,222 horizontal support and the ascending trendline, two important supports. Despite the altcoin’s 0.8% intraday decline, prices could have a brief rise before retesting the $1,222 level, which might act as resistance. The Ethereum price might drop by 8.5% and once again test the $1,100–$1,080 support if the selling pressure continues.
In contrast hand, the $1,160 can help buyers take back control of the trend. A bearish crossing between the MACD and the signal line indicates a sell signal for traders. A large difference between these slopes implies that sellers are now aggressive. The Ethereum price has fallen below the critical EMAs (20, 50, 100, and 200), suggesting that the market trend is clearly bearish.
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The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose.
You should be aware of all the risks associated with cryptocurrency trading, and seek advice from an independent financial advisor.
DISCLAIMER:
Any opinions, news, research, analyses, prices, or other information discussed in this presentation or linked to from this presentation are provided as general market commentary and do not constitute investment advice.
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