The momentum fades for BTC/USD and ETH/USD amidst the Bitcoin and Ethereum rally; what happens next?
Bitcoin’s Struggle to Gain Momentum
Bitcoin’s Upward Momentum Fades
Bitcoin’s attempt to reach its highest point in August at 28150 has fallen short, indicating a lack of upward momentum needed for a significant uptrend. The recent rally in Bitcoin turned out to be short-lived.
The drop below a crucial support level at the September 15 low of 26250, which coincided with the lower edge of the Ichimoku cloud and the 89-period moving average on the 240-minute charts, confirms that the upward pressure has faded. This break below support opens up two possibilities: Bitcoin could settle in a range between 24750 and 27500, or it could retest the June low of 24750.
Bitcoin’s Path of Least Resistance
Unless Bitcoin can surpass the end-August high of 28150, the easiest path for Bitcoin remains sideways or downward. Looking at the bigger picture, if Bitcoin breaks below 24750, it could indicate further weakness towards the March low of 19500.
Ethereum’s Role in Bitcoin’s Struggle
Ethereum’s charts highlight Bitcoin’s inability to rise towards its August high. Ethereum has faced strong resistance at the 200-period moving average, which aligns with the early-September high of 1660, as well as a downtrend line from August.
The retreat from this key resistance level, along with the subsequent fall below a horizontal trendline support at 1600, maintains a bearish bias for Ethereum.
Ethereum’s Potential Support Levels
ETH/USD risks retesting the August low of 1550. If it falls below this level, the next support is at the lower edge of a downtrend channel since April, currently around 1485. A break below the 1475-1550 region could pave the way towards the October low of 1370.
Ethereum’s Ichimoku Cloud Cover
As mentioned earlier this month, ETH/USD has been influenced by the bearish Ichimoku cloud cover on the weekly charts. Additionally, in recent weeks, ETH/USD has been struggling under the Ichimoku cloud on the daily charts. For the downward pressure to ease, Ethereum needs to surpass at least 1660.