Bears seek to regain control after rally in cryptocurrency markets
Despite the double-digit percentage gains recorded by most of the cryptocurrency market on Wednesday, the rise appears to be limited and capped against some key resistance levels.
Above: Bitcoin (BTCUSD)
Bitcoin finally ended the day with a gain of + 7.12%, with a close very close to the high. The day’s high was stopped against the daily Tenkan-Sen, which shares the same area of value as the 50% Fibonacci retracement and the lower part of a high-volume node. As a result of this rejection, bears are likely to reenter and take control of the market. The short-term target would be where Bitcoin has most recently found support: Senkou Span B (bottom of the cloud). However, if we draw a Fibonacci expansion from September 7, 2021 high ($ 52,935) to the exact date low ($ 42,582.70), then to the recent minor swing high found on September 18, 2021 ( $ 47,057.62) we can see the 161.8% Fibonacci expansion level ($ 34,328.50) is in the same value area as the 2021 volume checkpoint at 33,526.37 $. I expect a return to the $ 33,000 to $ 34,000 value area before Bitcoin resumes another bullish breakout to new all-time highs.
Above: Ethereum (ETHUSD)
Ethereum, likewise, made an impressive gain, closing at + 11.31% for the day. But Ethereum, like Bitcoin, failed to take advantage of the bullish close and failed against a collection of robust resistance levels. Between the $ 3000 to $ 3300 value zone, the daily Tenkan-Sen, Kijun-Sen, Senkou Span A and a high volume node in the volume profile exist in this zone. It’s no wonder Ethereum had some difficulty moving higher. Bears should push bulls lower towards $ 2,550, where the 38.2% Fibonacci retracement and Senkou Span B reside. Bulls need to hold this level to avoid a likely capitulation in Ethereum price action .
If the bears can pull Ethereum down to $ 2,500 and close around that value area, the Chikou Span will be below the cloud. This would create the most bearish trading conditions within the Ichimoku Kinko Hyo system that Ethereum has been in since May 2021. Ethereum could likely collapse up to the 61.8% Fibonacci retracement and 161 Fibonacci expansion. , 8% to $ 2,200. But an even more resounding crash is also likely.
A break out of the July 2021 lows could see Ethereum experience a punitive collapse in value towards an area of massive confluence of the Fibonacci price structure and the volume profile. Between $ 1,300 and $ 1,400, the 2021 volume checkpoint, 38.2% Fibonacci retracement and 300% Fibonacci expansion share the same value area – a magnet for future price declines .