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Market update: Bitcoin and Ethereum push through important resistance, but the market remains unstable

Market update: Bitcoin and Ethereum push through important resistance, but the market remains unstable

The stock market, as well as the crypto market, had a rough time this past week. Chinese real estate company Evergrande, which is on the verge of collapse, along with rising inflation in the U.S., has most likely been the culprit for these market-wide declines.

Bitcoin (BTC) fell from $57,500 to a low of $42,000 (-27%) last Friday in a span of less than 12 hours according to TradingView data. Bitcoin also took the rest of the crypto market down with it. Ethereum (ETH), for example, dropped from $4,650 to $3,500 (-25%) in the same time frame.

However, the two largest cryptocurrencies are making a recovery. BTC fluctuated between $47,500 and $49,000 in recent days, but managed to break through the important resistance of $50,000 last night. Meanwhile, the price is at $51,000 and the path to $52,000 seems to be set.

ETH quickly managed to break through the important resistance of $4,000 and stabilized between $4,000 and $4,100 over the past few days. Last night, like Bitcoin, it continued its path upwards, breaking through to $4,400.

Bitcoin Analysis

Bitcoin managed to break the resistance of $49,500 and $50,000 in a short period of time, after which it even broke $51,000. Currently, the price is stabilizing around $51,000 as the bulls try to make this a support level. If successful, Bitcoin is likely to test the $52,000 resistance soon, after which there may be a new uptrend. However, this has proven to be a stubborn resistance in the past, so it remains to be seen whether it will be broken.

If $51,000 and $52,000 are cleared with conviction, then there is a good chance that there will be another correction downwards. The price can find support at $50,000, $49,500 and $48,000. If all three of these levels are broken, then the price could fall back to $42,000.

Ethereum Analysis

The Ethereum price remained firmer and was able to climb above the $4,200 and $4,250 resistance levels. It even surpassed $4,300 and $4,350. After this, $4,400 was tested, after which it consolidated. A clear move above $4,400 could push the price towards $4,500.

On the downside, an initial support lies at $4,250. The next major support is now forming at the $4,150 level.

Rest of the market

Across the crypto market we are seeing green numbers today. Many altcoins are up 8% or more over the past day, including SOL, ADA, DOT, LUNA, AVAX, MATIC and CRO. The biggest winners today are MATIC, NEXO, LRC and BSV.

However, the market remains unstable. We have not yet returned to the old levels and it could be that this is a "relief bounce." Confidence in the market is not high with the macroeconomic factors now in play. Also, the $200 million Bitmart hack is putting a dent in confidence.

However, if Bitcoin and Ethereum pull through and manage to break through their resistance levels, there is also a chance that we could go further up. In any case, it is advisable to trade with caution.

Luc Smits van Oyen
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