Is the Recent Bull Run Over?
The crypto market has had a fantastic start to the new year, with prices soaring to new heights. However, as with all upward trends, there are also downsides. Some analysts question whether the market will continue to see an uptick or if the bullish rally has ended.
Bitcoin Derails: 8-Day EMA Crosses 21-Day SMA, Suggesting Downturn Ahead
The price of Bitcoin has taken a hit, falling 1.9% and rejecting the $23,000 level. This decline has caused alarm among investors as the 8-day exponential moving average (EMA) has slipped and crossed over the 21-day simple moving average (SMA), a technical indicator that suggests a downturn may be imminent.
This cross is a bearish signal, suggesting that short-term momentum is now weaker than long-term momentum. The last time this happened was in January 2018, just before the cryptocurrency market experienced a significant correction that foreshadowed the 2022 crypto winter.
At the time of press, Bitcoin is trading at $22,508. The relative strength index (RSI) is a key indicator for understanding the potential of cryptocurrency. Over the last month, the price of Bitcoin has been ascending toward the $20,000 level, presenting a buying opportunity for investors.
However, if the RSI falls below 40, the asset’s purchase at this point could be considered risky. Traders and investors should know that the strongest bullish doji candlestick pattern started at the $20,800 level. If the price declines further, it will negate the huge run from $16,000.
Ethereum Remains Bullish Despite Massive Selling Pressure
The price of Ethereum has remained bullish despite facing significant selling pressure. On Thursday, the token experienced a 1.5% drop, but it has not been greatly affected by the pressure. The support for Ethereum has consistently come in high ranges, around the $1500 level.
This resilience to selling pressure is a positive sign for Ethereum and suggests that the cryptocurrency is in a strong position. Furthermore, the high support levels indicate a significant demand for the token, and buyers are willing to step in at these levels.
Ethereum is trading above $1625, buoyed by support from the 21-day simple moving average (SMA). This positive price action results from increased demand for the token, which has helped to push prices higher.
The first level of resistance for Ethereum is $1490, which has previously acted as a barrier to further price gains. However, if Ethereum can break through this resistance level, it could continue the current bullish trend.
According to FX Street, Ethereum shows an ascending support pattern common in the crypto industry before a rally. If the trend continues, Ethereum is expected to gain 15% and reach $1850.
The 1-2-1-2 pattern is characterized by a series of higher lows and higher highs, indicating that the asset is in a strong bullish trend. This pattern has historically preceded a significant price increase, and traders and investors closely monitor Ethereum’s price action for signs of a continued trend.
