Bitcoin Chart Analysis, August 18, 2023
The price of Bitcoin fell sharply on Thursday night from $28,500 to $26,500.
Unconfirmed rumors said that SpaceX has dumped its holdings. It might have triggered losses with just a few buyers available. Bitcoin’s situation is also hampered by the rising yields of 10-year US bonds. They are currently sitting at 4.23% (near last autumn’s ATH).
Bitcoin strongly broke the uptrend line established at the beginning of the year. On the other hand, it may be seen as the diagonal neckline of the head and shoulders pattern. It also reminds the bottom line of a rising wedge pattern, heralding downfalls. The bearish divergence formed between April and July (new highs were not confirmed by the RSI – orange lines) had already warned of the possibility of a trend reversal, which has just materialized.
On the other hand, it should be noted that the declines occurred on a relatively small volume. Adding it up to possible followed quick price recovery, it may mean a typical flash crash. Much will depend on the close of the weekly candle, although crypto volatility over the weekend tends to remain reduced.
If the price does not return at least above the EMA 50 (sitting at around $26,900), the risk of a downside next week remains elevated. Levels worth watching are fibo retracements 0,382 ($25,774); 0,5 ($23, 915), and 0,618 ($22,000). The last one might provide strong support that has halted declines twice in the past.
Such levels might be interesting targets for possible short orders. However, placing such orders should occur with periodic rebounds, such as a retest of a blue uptrend line from below or EMA50. In short trading stop losses should be set just above moving average, trend line, or fibo retracement, depending on risk aversion.
Ethereum chart analysis, August 18, 2023
There are two growth lines on Ethereum – faster and slower. The first was broken from above, the second may be the future support. The downward candlestick has a long wick, which is a strong demand response to falls, that are not confirmed by a volume.
The chances of the weekly candlestick closing above the ascending trend line are very low, therefore the risk of further declines is significant. Levels to watch are the retracement of 0.382 ($1655), 0,5 ($1505), and 0,618 ($1355).
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