BTC/USD and ETH/USD daily price analysis
John Todorov, senior trader at dagx.live, said that Bitcoin reversed direction from $13,973.50 and plunged to a low of $10,530.70. That is a 24.63% fall within a day. The reason for such a sharp fall is that a vertical rally does not form any support levels en route. Hence, when the price starts falling, buyers do not step in until they spot a level that can act as a support. In this instance, buyers came in close to the 50% retracement of the latest leg of the rally. The 20-day EMA is located just below this level.
In a strong uptrend, the corrections usually last anywhere between one to three days, said Todorov from dagx.live. Currently, the bulls are attempting to resume the uptrend. They might face some resistance at $12,000 and above it at $13,000 but the real test will be at $13,973.50. If the BTC/USD pair breaks out of this resistance, the momentum will continue, thinks Todorov.
On the other hand, if the bears defend the overhead resistance, the pair might enter into a consolidation for a few days. On the downside, below $10,530.70, the next support is at $9,977.33, which is 61.8% Fibonacci retracement of the latest leg of the rally. If this support cracks, the digital currency will weaken and can drop to the 50-day SMA, according to dagx.live’s senior trader opinion.
Ether (ETH) had closed above $320.840 and had completed a rounding bottom pattern, John Todorov from dagx.live had suggested traders to wait before buying. He wanted to recommend a trade on a successful retest of the breakout level.
However, the fall dragged the price back towards the 20-day EMA, which held. Currently, the bulls are trying to propel the ETH/USD pair back above $320.840. If successful, it will be a positive sign. Both the moving averages are sloping up and the RSI is in the positive zone, which shows that bulls are in command. Therefore, traders can buy 50% of the desired allocation on a breakout and close above $320.840. The stop loss for this trade can be kept at $278, advises Todorov from dagx.live.
However, if the bulls fail to scale the overhead resistance, the bears will try to sink the price below the 20-day EMA. The next support on the downside is at the 50-day SMA and below it $224.086, thinks Todorov.