It’s not even close to being done yet, but the weekend rally for both bitcoin and ether has come to an end. The two cryptocurrencies have experienced a roller coaster ride since Friday, with both prices testing support near crucial psychological levels.
The price action in each currency has been similar, with bitcoin prices holding near the $24,000 level near the weekend low, then reversing course after the weekend highs were established. Ether held on to its gains, reaching a high of nearly $2,000 before giving up some of those gains on Monday.
Both currencies continue to trade below their all-time highs, which means more upside remains for investors who think that the current price action will play out in favor of higher prices. The last time bitcoin and ether traded this low was during the winter of 2018, when bitcoin fell below $10,000 and ether dropped below $800. Both cryptocurrencies bounced back at that time, and it appears that they may be ready to do so again.
Bitcoin Price Remains above $24K, while Ethereum Holds in the High $1,900s.
On Saturday, bitcoin traded between around $21,700 and $23,000, according to Tradingview.com. By Sunday, the price had risen to the upper-$20,000 range, with bitcoin trading as high as $24,100 before settling down to $22,600 by Monday morning.
Ethereum followed a similar pattern, rising from the mid-$1,400s on Saturday to $1,950 early Sunday, then falling back to just over $1,500 by Tuesday morning.
While bitcoin prices remain well above their all-time highs, the fact that they are trading lower than they did earlier this year is encouraging for investors who think that prices might rise further.
BTC bears are calling a “double top,” potential reversal incoming next week.
One bearish analyst, Tim Enneking, said on Twitter that he believes bitcoin is about to test resistance that has formed during the bull run.
“[Bitcoin] is forming another double top with a possible retest of the bottom at $13,200,” tweeted Enneking. He added that the “big picture” looks like a bull trap that can reverse direction if bitcoin breaks above $22,100.
Enneking also pointed out that bitcoin’s bullish momentum has stalled, something that is typically a sign that bulls will soon give up their positions.
“Bulls need a lot of new money (and/or sell pressure) to sustain rallies,” wrote Enneking. “When they don’t get it we see more sideways & consolidation.”
Another prominent cryptocurrency trader, Max Keiser, also thinks that bitcoin’s rally is running out of steam.
Keiser is still bullish on Bitcoin, however, adding that his outlook is less optimistic now that the cryptocurrency has hit some key technical resistance levels.
“I’m neutral on crypto right now but I believe [Bitcoin] has tested support and will test resistance,” tweeted Keiser. “Next move is critical.”
Keiser also called a “double top” in Bitcoin’s chart, noting that it could lead to a reversal in price action.
“Double Top @$21,764 — This is where buyers needed to buy in order to keep the uptrend alive. Now they have to sell,” tweeted Keiser.
BlackRock’s launch of a private Bitcoin trust could catapult the global cryptocurrency market cap to new heights as trillions of funds flow into the market.
Another big catalyst for bitcoin and other cryptocurrencies could be coming soon. On Thursday, BlackRock announced plans to launch a private investment vehicle that will invest in digital assets like bitcoin and ethereum. The company says that it will invest $1 billion in the asset class in 2020, making it one of the first publicly traded companies to commit to such an investment.
Investors hoping that the launch of the fund will help drive cryptocurrency prices higher should be aware that there are already plenty of large institutional investors in the space. For example, Fidelity Investments recently launched its own cryptocurrency trading platform, Bakkt, and Google Ventures invested $25 million in Circle Invest, a regulated US bitcoin trading app.
Finance professor Aswath Damodaran noted in February that “trillions” of dollars were flowing into cryptocurrencies because of fears associated with a potential financial crisis. If that’s true, then the creation of new funds that invest directly in digital assets could accelerate the trend.
Trading volume is declining this Sunday. BTC and ETH are likely to make their next moves shortly.
If bitcoin or ether drop below $17,650 or $845 respectively, traders can look for them to rebound quickly. But if those prices hold, they should begin rising towards their respective all-time highs.
According to CryptoCompare, the total global 24-hour trading volume for bitcoin and ether reached a combined $12 billion on Sunday. That marked a decrease compared to the previous day, when volumes topped $14 billion.
That said, cryptocurrency markets are expected to experience a significant rebound on Thursday, when there will be a slew of new announcements regarding cryptocurrency regulation and taxation.
Meanwhile, for Bitcoin, the short-term trend remains upward, although the longer-term trend remains downward. In terms of the latter, bitcoin’s long-term trend line (blue) is currently broken, suggesting that a decline is imminent.
Click the image to sign-up for Taxbit and get 10% Off!
