Bitcoin (BTC/USD), Ether (ETH/USD) Bounce Back From Sell-Off

The two dominant cryptocurrenciesBitcoin and Ethereum continue to lure both retailers and large corporations despite the recent pull-back in prices that resulted in BTC/USD and ETH/USD falling 26% and 36% respectively throughout the course of last week, invoking panic that the ‘bubble’ had burst.

However, after six consecutive months of gains, it appears the retracement in prices from all-time highs may have been a mere price correction rather than a reversal in trend as bulls manage to take back control, driving short-term price action towards the upside, igniting the volatility regime that initially fueled the bullish reprisal of the ‘Bitcoin bubble’.

The adoption of major cryptocurrencies by key market players has contributed to the recent rally, with the likes of PayPal and Tesla attributing to the large upswings. Limited supply of the virtual currency has led some investors to believe Bitcoin and Ether possess ‘safe-haven’ appeal, competing with Gold and Silver as a hedge against inflation and US Dollar weakness.

BITCOIN (BTC/USD) TECHNICAL ANALYSIS

After reaching another all-time high on 21 February, the strong upward momentum that pushed prices above $58,000 faltered, resulting in a brief sell-off. Bitcoin prices then fell to key Fibonacci support at $45,463, formed by the 23.6% retracement level of the 2020 – 2021 move.

But, with the psychological level of $45,000 holding the bears at bay, bulls were able to bounce off of support. Price action then ran into a wall of resistance, formed by the 14.4% Fibonacci retracement level of the move mentioned above.

Meanwhile, the Commodity Channel Index (CCI) remains within normal range, currently resting at a positive reading of 19.

Bitcoin (BTC/USD) Daily Chart

Bitcoin (BTC/USD), Ether (ETH/USD) Bounce Back from Sell-Off

Chart prepared by Tammy Da Costa, IG

1 2
View single page >> |

Disclosure: See the full disclosure for DailyFX here.

How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.