Last week for Bitcoin was marked by an attempt to break out of the 200-week SMA and stay above its value. While the former was successful, the latter ended in failure. Can we therefore expect another attack on resistance? Meanwhile, the US interest rate decision is looming in the background.
Bitcoin on the weekly chart
It has almost become a tradition that we look at Bitcoin from both a weekly and a one-day perspective. Looking through the prism of the former, we see that the past week closed slightly below the 200-week SMA (blue line). This happened in spite of its earlier clear overshoot. The result, the start of the new week, is a deepening of the downward movement. MACD for the time being was heading towards a bullish intersection. Currently, however, the movement of the indicator is gently flattening, so that this cross may not take place at all. Nevertheless, there is still a lot of time left until the end of the week, so it is worth watching the upcoming price action, as it could change a lot.
Bitcoin on the one-day chart
The chart on the one-day interval, on the other hand, shows us even more interesting details. The first of these is the false breakout. It manifested itself in both the short-term overcoming of the boundary of the ascending channel and the aforementioned 200-week SMA. This breakout did not end in a correction, but in a return to the consolidation zone inside the formation. A week ago, we also pointed out the presence of a bearish divergence and the possible possibility of playing it out with declines. These we are currently observing. The MACD is heading towards a bearish cross. The Stochastic RSI, on the other hand, is showing a dynamic movement toward the oversold zone.
Looking for ranges of potential movements in the coming days, we would focus on the boundaries of the formation. The upper range is currently $23,200 and is slightly above the 200-day moving average. The lower range, on the other hand, is $19,700. A breakout of the former, could result in an attack in the vicinity of $28,600, and the latter in a drop near this year’s lows.
Ethereum is progressing according to plan
As we predicted in our analysis a week ago, Ethereum encountered strong resistance at the $1,700 level. As a result, ETH has returned to levels close to the 2018 peak. Looking at the construction of one-day candles, we can see that the wick of Tuesday’s one significantly knocked the region downward. Nevertheless, the price, in view of the session’s close, managed to bring itself to the level of $1,450.
Thus, events on the chart clearly followed the bearish divergence present on the RSI. By the way, we can note that ETH has bounced off the 20-day moving average inside the Bollinger Bands. MACD, on the other hand, stands at the threshold of a bearish crossover. Thus, a possible upward move could be a renewed attack on $1,700. Declines, on the other hand, could take the price as low as around $1,280.
Bitcoin’s dominance is weakening
It is interesting to note that at a time when the market clearly does not know which way to go, Bitcoin’s dominance is diminishing. It currently stands at close to 42.3% and is heading to test the descending triangle from the top, from which it made a breakout back in May. It is worth keeping an eye on the long-term trend line in these circumstances, the encounter of which, may herald market turbulence.
Volatility is also entitled to occur due to Wednesday’s FOMC meeting. Analysts are predicting a 0.75% increase in US interest rates. Their possible deviation from the indications, could give rise to a new short-term trend.