Bitcoin (BTC) Technical Outlook: Neutral
- Bitcoin prices shoot through $40,000, now $45,000 is in sight
- BTC/USD follows equities as risk-on sentiment returns
- Ethereum (ETH) outperforms Bitcoin but bulls face pressure at $3,200?
Bitcoin Fundamentals – Is risk-on sentiment here to stay?
Over the past two weeks, Bitcoin prices have continued to rise from the March 7 low as risk-on sentiment returned to the markets. As the ongoing conflict between the Ukraine and Russia enters the second month, sanctions against Russia and increased probability of more aggressive monetary tightening has done little to deter investors from riskier assets such as equities and cryptocurrency.
Given that inflation remains a key concern for both consumers and policymakers, low interest rates have supported stocks and Bitcoin despite rising geopolitical risks.
Although Bitcoin remains the largest cryptocurrency in terms of market capitalization, Ethereum has recently outperformed the ‘father’ of digital assets as central banks demonstrate a greater interest in exploring digital currency.
Due to the nature of the blockchains, the Ethereum blockchain is more environmentally friendly option and the unlimited supply of coins makes it a more feasible option for governments who are embracing the concept of digital assets as a potential medium of exchange, provided that there is regulatory oversight.
Bitcoin (BTC) Technical Analysis
After rising above the $40,000 handle, a level that remains as critical support, a break above trendline prior trendline resistance turned support, Bitcoin prices continued to climb, driving prices to the 61.8 Fibonacci retracement level of the 2021 move at $44,106 Fibonacci retracement level.
As buyers and sellers battle it out, the 50-week MA (moving average (MA)will likely assist in providing an additional layer of resistance at $45,868 which then leaves the door open for the 50% retracement of the April – May 2021 move at $47,419.
Bitcoin (BTC) Weekly Chart
Chart prepared by Tammy Da Costa using TradingView
On the contrary, failure to gain traction above $45,000 could see increased selling pressure back towards $42,000 and a potential push back to $40,000.
Bitcoin (BTC) Daily Chart
Chart prepared by Tammy Da Costa using TradingView
Ether (ETH) Technical Analysis
Following in Bitcoin’s footsteps, Ethereum has continued to soar over the past two weeks, resulting in an approximate 30% increase from the March 7th low.
Since falling to $2,160 in January, Ether prices rose until running into a wall of resistance in February, just below $3,280 which continues to hold as critical resistance. With prices rising above the 50% retracement of the 2021 move at $2,878 (now holding as support), bulls have continued to gain traction, driving prices past the key psychological resistance turned support at $3,000, ETH/USD continues to eye $3,200 in an effort to retest the February high of $3,280.
Ethereum Daily Chart
Chart prepared by Tammy Da Costa using TradingView
— Written by Tammy Da Costa, Analyst for DailyFX.com
Contact and follow Tammy on Twitter: @Tams707