News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
Wall Street
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Stocks appear to be in a corrective phase but could get put to the test; levels and lines to watch in the days ahead. Get your weekly equities forecast from @PaulRobinsonFX here: https://t.co/H1BaTlIHjY https://t.co/zP3mjfslSD
  • Currency exchange rates are impacted by several factors. Are different world leaders a contributing factor? Find out here: https://t.co/4jsORznRTE https://t.co/Of1thU4zXw
  • Further your forex knowledge and gain insights from our expert analysts on AUD with our free guide, available today: https://t.co/p2FhEwym1E https://t.co/MjiYB85TSF
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here: https://t.co/BdgFmkRxVw https://t.co/fIO9TP7D62
  • Trading Forex is not a shortcut to instant wealth, excessive leverage can magnify losses, and sentiment is a powerful indicator. Learn about these principles in depth here: https://t.co/lZFM8youtX https://t.co/Xja8DHUqlH
  • Risk management is one of the most important aspects of successful trading, but is often overlooked. What are some basic principles or risk management? Find out from @PaulRobinsonFX here: https://t.co/IsnpfJhp91 https://t.co/9po5Lg4vnR
  • The Japanese Yen is eyeing the upcoming Bank of Japan rate decision and CPI figures, but JPY crosses will likely remain dependent on broader market sentiment. Get your weekly $JPY forecast from @FxWestwater here: https://t.co/x9rbQpPfWe https://t.co/2x1R5XTVea
  • Consolidation or bull flag? A bull flag is a continuation pattern that occurs as a brief pause in the trend following a strong price move higher. Learn how to better spot these formations here: https://t.co/yOEvLjKnct https://t.co/uCaWQiu4Ly
  • Crude and Brent oil are on track to extend higher as Gulf Coast supply disruptions and a positive OPEC report bolster sentiment. Uranium is on a massive surge, aided by the famous Wall Street Bets group. Get your market update from @FxWestwater here:https://t.co/XrpV0jcy8e https://t.co/g2To3LmUah
  • RT @michaeljburry: Read thread.
Bitcoin, Ethereum Outlook: Cryptos Go Parabolic, is a Correction Due?

Bitcoin, Ethereum Outlook: Cryptos Go Parabolic, is a Correction Due?

Daniel Moss, Analyst

Bitcoin, Ethereum, Cryptocurrency, BTC/USD, ETH/USD – Talking Points:

  • The long-term outlook for both Bitcoin and Ethereum remains skewed to the topside.
  • However, both cryptocurrencies could be at risk of a near-term pullback as their respective surges higher appear relatively overextended.
Advertisement

As mentioned in previous reports, the provision of extraordinary fiscal and monetary stimulus measures in response to the novel coronavirus pandemic has underpinned Bitcoin and Ethereum prices since the March 2020 nadir.

Although the longer-term outlook for both cryptocurrencies remains overly bullish, their recent topside surges appear somewhat overextended. This suggests a near-term pullback could be at hand. Here are the key technical levels to watch for BTC and ETH in the weeks ahead.

Bitcoin (BTC) Weekly Chart – 300% Fibonacci Capping Topside Potential

Bitcoin, Ethereum Outlook: Cryptos Go Parabolic, is a Correction Due?

Bitcoin weekly chart created using Tradingview

Bitcoin has surged over 83% in the last 3 weeks after pushing above the psychologically imposing $30,000 mark, with prices now probing key resistance at the 300% Fibonacci expansion level (35352).

However, with the RSI approaching its highest weekly overbought readings since 2013, and prices tracking substantially above the 8-week exponential moving average (23110), a correction lower looks likely in the near term.

Failing to gain a firm foothold above $35,000 would likely allow sellers to drive prices back towards psychological support at $30,000, with a break below carving a path to test former resistance-turned-support at the Symmetrical Triangle’s implied measured move (28108).

Alternatively, a convincing push above the 300% Fibonacci could bring the $40,000 mark into the crosshairs.

Bitcoin (BTC) Daily Chart – Shooting Star Hints at Short-Term Pullback

Bitcoin, Ethereum Outlook: Cryptos Go Parabolic, is a Correction Due?

Bitcoin daily chart created using Tradingview

Zooming into the daily timeframe also hints at the possibility of a short-term pullback for the popular cryptocurrency, as a bearish Shooting Star candlestick begins to take shape just shy of the 200% Fibonacci expansion (35114).

A reversal back towards psychological support at $30,000 looks on the cards if buyers fail to hurdle Fibonacci resistance. Clearing that would probably propel Bitcoin back to support at the December 27 high (28244).

On the other hand, a daily close above $35,000 could see prices push towards the 227.2% Fibonacci (36913).

Ethereum (ETH) Weekly Chart – Eyeing Key Resistance at $1000

Bitcoin, Ethereum Outlook: Cryptos Go Parabolic, is a Correction Due?

Ethereum weekly chart created using Tradingview

Ethereum has also stormed higher in the last 3 weeks, climbing over 65% to test key resistance at the February 2018 high (979).

However, with the RSI surging to its most overbought readings since 2018, the second-most heavily traded cryptocurrency could be at risk of a reversal lower in the near term.

Failing to clear the $1000 mark could generate a downside push towards the May 2018 high (838), with a break below bringing the $700 level into focus.

Conversely, breaching psychological resistance could neutralize near-term selling pressure and carve a path for price to challenge the record high (1424) set in January 2018.

Ethereum (ETH) Daily Chart – 200% Fibonacci Coming Into Focus

Bitcoin, Ethereum Outlook: Cryptos Go Parabolic, is a Correction Due?

Ethereum daily chart created using Tradingview

The daily timeframe, however, hints at further upside for Ethereum in the near term, as buyers drive prices through a flurry of key resistance levels at the 161.8% Fibonacci (956.27) and February 2018 high (979).

That being said, the recent topside push does appear to be overextended, given the distance price is travelling from the 8-day EMA (781.45) and the extreme overbought readings seen on the RSI.

Therefore, an aggressive pullback towards the May 2018 high (838) could be in the offing if price fails to close above psychological resistance at $1000 on a daily close basis.

Clearing that probably precipitates a challenge of former resistance-turned-support at the December high (757.67).

On the contrary, a daily close above $1000 could open the door for buyers to begin probing the 200% Fibonacci expansion level (1108.76).

-- Written by Daniel Moss, Analyst for DailyFX

Follow me on Twitter @DanielGMoss

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES