- Bitcoin and Ethereum sit on top of critical support levels that have been able to absorb the selling pressure of the past month.
- However, the strength of these barriers seems to be weakening over time.
- Multiple technical patterns suggest that these support walls will soon break providing sidelined investors an opportunity to get back into the market.
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Bitcoin and Ethereum have been trading sideways for the past few months. Now, different technical patterns suggest they are bound for a bearish impulse before resuming their respective uptrends.
Bitcoin Holds Above Key Support Level
Bitcoin has been consolidating within a narrow range for the past two months without providing any clear signs of where it is headed.
Since early May, its price has mostly traded between the 50% and 38.2% Fibonacci retracement levels that sit at $8,900 and $10,000, respectively.
Due to the significance of these support and resistance levels, breaking out of this zone will be the catalyst that determines the direction of BTC’s trend. Until that happens, investors must wait to avoid getting caught on the wrong side of the breakout.
Despite the uncertainty around the flagship cryptocurrency, the TD sequential indicator estimates that momentum for a bearish impulse is building up slowly. This technical index presented a sell signal in the form of a green nine candlestick at the beginning of the month.
The bearish formation forecasts a one to four candlestick correction before Bitcoin resumes its historic uptrend.
Such a pessimistic scenario aligns with Willy Woo’s outlook.
The on-chain analyst believes that Bitcoin was preparing to enter a new bullish cycle at the beginning of the year. However, the market crash of mid-March and fears over the ongoing global pandemic appear to have “killed the party.”
Woo maintains that Bitcoin is now be bound for another bearish month before it finally enters a new…