Bitcoin, BTC/USD, Ethereum, Ethereum/USD – Forecast:
- bitcoin It is trying to break through the bullish flag pattern.
- A potential reverse head and shoulders is brewing in ETH/American dollar.
- What are the expectations and what are the key levels to watch?
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Cryptocurrencies jumped after a US judge ruled Thursday that Ripple Labs Inc did not violate federal securities law by selling its XRP token on public exchanges. The technical charts indicate that Bitcoin and Ethereum may be preparing for another rally.
BTC/USD daily chart
Chart by Manish Gradi using TradingView
BTC/USD rebounded from nearby key support on the 200-day moving average, coinciding with the lower edge of a rising channel from early 2023. This coupled with a subsequent rally above minor resistance at May high at 28,460 confirmed the downside. The pressure faded, increasing the odds of further gains.
BTC/USD daily chart
Chart by Manish Gradi using TradingView; Refer to notes below
As the color-coded daily candlestick charts show, the April-May decline was a consolidation within the broader bullish phase.
Recently, the BTC/USD pair has consolidated into a flag pattern. A break above the recent range could open the way towards the upper edge of the channel (now at around 34,800). More importantly, such a breach would be associated with a rally above a vital hurdle on the upper edge of the Ichimoku Cloud on the weekly chart for the first time since 2022 – a significant bullish signal.
On the downside, BTC/USD needs to stay above the 200-day moving average (now at around 25,600) for the bullish pressure to remain intact.
BTC/USD weekly chart
Chart by Manish Gradi using TradingView
Ethereum: Fermenting a Possible Reverse Head and Shoulders
On the technical charts, the ETH/USD pair has rebounded last month from a strong converging support on the 200-day moving average, coinciding with the upper edge of a rising trend line from the end of 2022. Holding above the key average is an important sign, as it remains on Unchanged mid-range upward bias. See our previous update highlighting the significance of “Bitcoin and Ethereum Slides as Fed Signals Higher Rates: BTC/USD and Ethereum/USD Rate Settings,” posted on June 15.
ETH/USD daily chart
Chart by Manish Gradi using TradingView; Refer to notes below
From a trend perspective, the broader bias of ETH/USD remains bullish, as shown by the color-coded daily candlestick chart.
ETH/USD daily chart
Chart by Manish Gradi using TradingView
It is now trying to break through a major barrier around 1975-2000. Such a break would trigger a simple head and shoulders reversal pattern (left shoulder at May low, head at June low, right shoulder at early July low), which could open the way towards 2250, the price target for the pattern. .
Note: The above color-coded chart(s) are (are) based on trend/momentum indicators to reduce subjective biases in trend identification. It is an attempt to separate the bullish and bearish phases, and consolidate within a trend-versus-trend reversal. The blue candles represent a bullish stage. Red candles represent a bearish phase. Gray candlesticks act as consolidation phases (during a bullish or bearish phase), but they sometimes tend to form at the end of a trend. Candle colors are not predictive – they only indicate the current trend. In fact, the color of the candle can change in the next bar. False patterns can occur around the 200-period moving average, around support/resistance, and/or in a sideways/volatility market. The author does not guarantee the accuracy of the information. Past performance is not indicative of future performance. Users of the information do so at their own risk.
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– Posted by Manish Grady, Strategist for DailyFX.com
Connect with Jaradi and follow her on Twitter: @JaradiManish