Bitcoin (BTCUSD) (3-day/8-hour comparison)
Bitcoin bulls continue to struggle to keep control. The conflict in Ukraine has been a major catalyst recently to drive prices down as people are fleeing “risky” assets, but the writing has been on the wall for some time if you’ve read our reports the past few months.
On our 3-day chart, you can see the recent rejection from the orange “neutral” zone a few days before the sell-off that occurred when news of the Russian invasion broke. On our 8-hour chart, we can see the red “sell zone was tagged just before the drop-off, and our green “buy” zone was front-runned. Another attempt at this red zone seems possible, but losing $40k as support at this point will paint a very ugly picture and new lows should be expected if that occurs.
We are currently seeing a potentially promising rally as we battle the $41k resistance level. Another attempt at the $43k-$45k area seems possible, and until that zone is cleared, bears are still running the show. Sub-$30k prices are very much in play, and the uncertainty of all markets has made price action extremely volatile in recent weeks. Trade Safe.
Ethereum (ETHUSD) (3-day/8-hour comparison)
Ethereum has been interesting to watch recently. Sometimes lagging, and sometimes leading in relation to BTC, and also a good indicator for overall market health.
The situation for Ethereum hasn’t changed much, we are still looking for bulls to reclaim above $3200 or bears to break $2200. On our 8-hour chart you can see we are currently sitting at the orange “neutral” zone, and it’s acting as resistance.
If bulls can push beyond that $2821 level with a candle close, we should see at least a wick up into the red box above $3200. Another rejection from this orange zone would make sub-$2000 prices very likely, invalidated if we see a high time frame close above $3400.
Fundamentals & Correlations (Weekly)
BTC dominance (BTC.D) continues to rise, but still well below the 51% level, giving alts some breathing room. Even at this low level, we can see the fragility of altcoins on the recent drops in Bitcoin. Bitcoin will drop 2% and altcoins will drop 5-10%. Bitcoin will drop 10%, and altcoins will drop 30-40%. There is amplified upside on the rallies as well, but not quite as much as we see on the drops.
The US Dollar Index (DXY) has maintained a bullish market structure, and the crisis in Ukraine seems to have only helped it gain strength. Opening the week last night with a huge gap up, and consolidating under this high timeframe resistance, further upside seems likely. This would be more bearish fuel to the fire for both crypto and legacy markets.