The cryptocurrency market is finally coming of age and this is supported by the fact that numerous financial magnates such as George Soros and the Rockefeller family are now starting to take positions into the up-and-coming asset class. I say this as the same individuals were previously very critical and sceptical in regard to the cryptocurrency market. As George Soros, back in January gave a speech in the World Economic Forum where he termed the cryptocurrency market as a bubble that is about to burst. Moreover, in the past week, Bloomberg have given confirmed reports that the $26 billion Soros Fund has penned a blueprint of how it shall trade various digital assets. However, the Rockefellers venture capital firm namely the Venrock, has adopted a distinctive approach to the whole scenario as they have consorted with Coinfund. Through this partnership, they shall aid entrepreneurs launch firms that revolve around the blockchain technology. Thus, due to this move Venrock shall be part of the process of architecting several cryptocurrency economies and token based ventures across the realm.
Additionally, I believe there shall be a price rise in the cryptocurrency market as more conventional institutional investors enter this asset class. I say this as normal retail investors shall become more confident in trading this asset class due to the entry of these investing behemoths as they shall provide more legitimacy to the market thus lending us more proof that cryptocurrencies are here to stay.
Thus, in this article I shall take a technical outlook into two of the most popular cryptos which are Bitcoin(BTC-USD) and Ethereum (ETH-USD). I have focused on the technical’s as I deem them to be very important in this asset class as I have witnessed first-hand how these assets obey Fibonacci lines and candlestick signals in past trades and articles.
Bitcoin prices have started rising sharply in the past few hours thus showing us that the bullish sentiment in the currency has most definitely made a strong comeback. As of the time of writing this piece Bitcoin has ascended by 20% in six hours which has led it to reach the $ 8,055 mark. The bullish emotion is buttressed by market data as purchase orders for the BTC-USD pair accounted for 58% of all orders in the past 24 hours. But as Bitcoins’ price ascended the coinage faced a short squeeze which essentially meant that the increasing price level forced traders to egress out of their short positions thus initiating a further sturdier up run.
On the technical analysis frontier, Bitcoin latest candle signal can be classified as a rising three methods formation in the making. I say as there has been one large bullish candlestick signal that has been followed through by a smaller bullish body candle that has so far stayed within the high range of the first long bullish candle. This pattern can be considered similar to the western bull flag pattern.
On the moving average frontier, we have now finally seen several exponential moving averages rise above the 20-day moving average. Moreover, the 20-day MA has finally started culminating its steep decline and is now starting to flatten out. Currently, the 50-day MA is a mere 570 dollars away from the current price and I firmly believe that this currency shall attempt to rise above it plus it shall be successful in doing so.
On the average directional index indicator, we see the indicator has now reached the 45 mark on my setting and is steeply ascending thus I am very positive that the crypto will rise in the coming days. Moreover, the RSI indicators line has started a slight ascent thus signifying a change in the trend meaning that we just entered a clear bullish chapter.
For resistance, I utilised Fibonacci tools to anticipate the levels clearly and we see that the crypto has just managed to break above the 78.60% mark. I believe it shall face slight resistance when it touches the 100%($8,385) fib resistance line but I am certain it shall break that mark. Moreover, I expect the crypto to slightly break above the 127.2% ($8,913) level but its shall not be able to rise much above it. Moreover, the 161.8% resistance level is at $9,584.
Thus, overall I expect Bitcoin to rise by around 700 to 900 dollars from the $8,055 price mark it is at currently. Once it touches this mark, I am positive it shall slow down into a box range. Moreover, this is a price projection of a rather short time frame thus once it hits the above-mentioned mark I anticipate a change or slowing down in the momentum.
The second cryptocurrency I shall analyse in this piece is Ethereum and when we look at the chart, we notice that the chart layout is very similar to the one of Bitcoin. Ethereum can essentially be pigeon-holed as an all-purpose scripting blockchain that was established by one of the greatest minds of our era. As it is the footing for numerous other mainstream cryptocurrencies we can consider Ethereum to one day fully rival the battle-hardened Bitcoin.
When this analytical article was penned, Ethereum had just completed a 19.37% rise in its price which has pushed the crypto upto the $515 mark and that too in only 24 hours. This transference in the price level comes after investors have seen numerous months of gradually declining prices in Ethereum and at one point in January of this year the currency was worth a whooping $1,300. But now the question arises as to what mark will the ascent stop at thus let’s peek at the coins’ technical analysis.
On the candlestick frontier, the candle formation is basically alike to the one seen in the Bitcoin chart as the pattern is the rising 3 methods. The only difference is that for Ethereum the bullish candles are not as large as the ones seen in Bitcoin plus the crypto has completed the formation according to me thus making the pattern fall between a historical and current pattern.
While for the moving averages, we see that the short terms EMA’s have also crossed over the 20-day MA thus signifying the commencement of a bullish run. The 50-day MA is a mere 80 points away from the current price and I am positive that the crypto shall touch the 50-day MA in the days to come. But also, I am rather sceptical of its making a clear bullish breakout above the 50-day MA as I believe it shall test it but return underneath it later on.
Whilst for the Relative Strength Index, we see the crypto is now steadily rising at a steeper gradient than the one seen in the RSI of Bitcoin. The RSI value currently stands at 56.36. On the Average directional index facet, the line is steeply rising and has touched the 55 mark thus clearly showing that the bullish trend strength is strong.
For resistance, I am confident that Ethereum will not be able to make a clear bullish breakout above the 100% Fibonacci resistance level as its peer the Bitcoin shall do. I say this as there is strong bullish momentum in the coin but the volume of this strength is naturally lower in comparison to Bitcoins volume as the Bitcoin is a mammoth in the cryptocurrency market. The 100% fib resistance level is at $590.27 whilst the 127.2% level is at $651.30 and the 161.8% level is at $728.93. I am confident that in the coming week this crypto won’t be able to reach the 127.2% level and the 161.8% level.
On the overall, I am certain that the crypto shall rise by 75 points from the current price in the coming days but if it rises above the 75-point mark then it shall be on a very shaky footing thereon as the current technical conditions don’t support a rise above 75 points.
Overall I anticipate the Bitcoin cryptocurrency to rise by around $700 to $900 in the near future. I have taken a bit lower mark for profit potential mark as it is below the 127.2% level but I have done it so as to play a bit safe. Moreover, I am expecting a 75 dollar rise from the current price of $515 for Ethereum.
Moreover, when trading cryptos such as the ones mentioned above investors ought to ensure that they utilise a trailing stop so as to capture the best profit margins and at the same instance to protect their capital.
Good luck trading.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.