Bitcoin lost over 2,000 points in market value in the last 24 hours.
Likewise, Ethereum took a 7.5% nosedive, erasing recent gains.
The downturn put BTC and ETH at risk of a steep correction.
Share this article
Volatility struck the cryptocurrency market ahead of Ethereum’s transition to Proof-of-Stake. As the Merge approaches, it appears that Bitcoin and Ethereum are preparing for a significant price movement.
Bitcoin and Ethereum at Risk
Bitcoin and Ethereum have retraced more than 7% over the past 24 hours, increasing the risk of a stepper correction.
The recent sell-off may have surprised investors as more than $220 million worth of long positions were liquidated. The report that U.S. inflation fell by less than analysts’ expectations in August appears to have overweighted the mounting speculation over Ethereum’s transition to Proof-of-Stake. Now, it remains to be seen whether “the Merge” could become a “sell the news” event.
The 50-day moving average rejected the pioneer cryptocurrency’s uptrend. As prices continue to decline, the nearest support level appears to be the lower boundary of a parallel channel developed over the past month on the daily chart. If this level at $18,700 fails to hold, a downswing toward June 2019’s high at $13,880 can be expected.
Bitcoin needs to gain the 50-day moving average at $22,000 as support to have a chance of invalidating the pessimistic outlook and advancing to the 200-day moving average at $29,000.
BTC/USD daily chart. (Source: TradingView)
Ethereum also spells trouble as it appears to create a head-and-shoulders pattern on its daily chart. A spike in selling pressure that sends ETH below $1,500 will likely validate this bearish formation. If this were to happen, a 30% correction to $1,000 could be triggered.
It is worth noting that Ethereum needs to make a U-turn and print a daily close above $1,800 to invalidate the bearish thesis. If this were to happen, ETH would likely gain the strength to advance toward the 200-day moving average at $2,100.
ETH/USD daily chart. (Source: TradingView)
Given the amount of anticipation around the Merge, a spike in volatility can be expected. It is imperative to wait for Ethereum’s transition to Proof-of-Stake to understand better where the trend will resolve.
Disclosure: At the time of writing, the author of this piece owned BTC and ETH.
For more key market trends, subscribe to our YouTube channel and get weekly updates from our lead bitcoin analyst Nathan Batchelor.
Share this article
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
See full terms and conditions.