Technical analysis
The way to pass on transactions, enjoy a wise life.
The price of Bitcoin has fallen for two consecutive days, including the closing prices of the day before yesterday and today, both showing a certain amount of volume, and this volume is quite large. The day before yesterday, a long bearish candlestick was formed, and today's closing price showed a longer lower shadow, indicating that Bitcoin is retesting 92,500 USD, showing a long lower shadow. In this situation, it generally indicates signs of short-term stabilization, so the likelihood of breaking 92,500 USD recently is not high.
So if it breaks, Bitcoin may go to a deeper position, say 87,000. Therefore, today, the price of Bitcoin is very likely to see a brief and strong upward rebound, including Ethereum and some other cryptocurrencies, which may also experience a brief upward rebound.
Now let's take a look at the specific market trends. We can see that the current price of Bitcoin is 95,000 USD. Just now we talked about Bitcoin showing a long lower shadow, which is at a support level of 92,500 USD, and of course, there has been a certain amount of volume. The upward pressure is also very obvious. So if Bitcoin briefly rebounds, what position will it rebound to?
We can see on the 4-hour chart that we need to pay attention to two massive volume bars. This large volume corresponds to the long shadow of the first day's decline, including the recent two massive volume bars or high-volume bars. The volume bars correspond to this kind of candlestick pattern. So a similar candlestick pattern is also a short-term bullish candlestick combination. Therefore, for Bitcoin on the 4-hour level, we can extend the upward resistance level through the horizontal trend line, and we will find that the upward resistance for Bitcoin is at 96,000 USD. So if Bitcoin rebounds from 92,000 USD to 96,000 USD, it will encounter some resistance. If it continues to break upwards, Bitcoin will test 98,000. Therefore, the intraday support for Bitcoin's price is likely to be around 94,000 USD, while the upper resistance level is 96,000 USD.
So, if Bitcoin breaks down again at 92,500 USD, where will it go? Don't underestimate this question. If the Bitcoin price breaks this level downwards, the next important support actually extends further back, which is at 87,000 USD. This place is, of course, a strong support level, and also a very good buying point, but this position will need to wait for some time.
When Bitcoin experiences a third downward pullback, it may test. Why is it called the third time? The first time was at 100,800, the second time was at 100,200 USD, which means that after Bitcoin surged in the past two days, it pulled back down. When it surged, we said Bitcoin might find support at 99,700 USD, which is the 100,000 mark. What is the reason for this?
Bitcoin has formed a double bottom structure at this point, but when it pulled back, it did not form effective support at that position, instead showing a long bearish candlestick that broke down directly, arriving at the position of 92,500 USD. Therefore, in intraday trading, Bitcoin's pressure levels, apart from 96,000, also have 99,000 USD above. We can equate this to around 100,000 USD, and when it reaches this position, we must pay attention. It is very likely to be strongly pressured by a descending trend line. As the time cycle progresses, Bitcoin may show a pattern like this, reaching its descending trend line position, which is a crossover point, where the crossover point is at 99,700, as well as the horizontal trend line's resistance and the descending trend line's resistance.
Therefore, summarizing the price movement of Bitcoin, the upward resistance levels are 96,000 and 99,700 USD, especially the latter will be an important short-term profit-taking opportunity.
So how should we interpret the trend of Ethereum? The current price of Ethereum is 3,338 USD. In the morning, our trading system actually had further entry around 3,300 USD. At this position, the price of Ethereum also formed a candlestick combination, which is a propeller, indicating that there is a very long shadow below, and its volume is also high. This means that compared to the day before yesterday, the volume has remained relatively high, or even expanded a bit. So one is a long bearish candlestick, and the other is a controversial propeller candlestick pattern. In this situation, especially at horizontal resistance and support levels, such a candlestick pattern usually signals a short-term stop in decline.
Therefore, currently for Ethereum, we see that its important support is at 3,200 USD. This position will become a crucial support for Ethereum. When it reaches this position, it cannot break again. If it breaks again, Ethereum will go to 3,030 USD, or even lower, of course, this is following the price of Bitcoin. If a significant pullback occurs, the potential impact on Ethereum will also be a key area for us to buy the dip. It just depends on whether the opportunity is given.
If Ethereum rebounds at this point, where will it go? We see on the 4-hour level, the price movement of Ethereum shows two high-volume bars. These two high-volume bars are very similar to Bitcoin and also signal a stop in decline. Therefore, if it rebounds upwards, the first important resistance level for Ethereum is actually at 3,300 USD. This location is also a very important resistance level for Ethereum, at around 3,320 USD, because in the previous price movements, this was a platform level. We said that it might form a double bottom structure. The overall high point can also be understood as a range or a double bottom structure. After that, the price of Ethereum went up, reaching a maximum of 3,700 USD.
The volume during this decline has been much larger than before, somewhat similar to but slightly smaller than the previous volume, but it is quickly catching up. However, it has not broken; the first deep decline reached a low of 3,100 USD, and then began to stabilize around 3,200 USD.
Ethereum, since it has broken through 3,320 USD, has already completed the breakout of the previous horizontal resistance level. Therefore, the next upward rebound high point of Ethereum is something we need to pay attention to, and we need to redefine the rebound resistance level. 3,430 USD, which is at the upper boundary of this range or the double bottom, will become a significant resistance for Ethereum today or tomorrow. Of course, short-term traders can take some profits at this position, as the pressure here is very strong. If it moves higher, it will reach 3,500 USD.
Currently, we should not look too far ahead, as we do not know whether there will be another test of the bottom before the Spring Festival. After all, on the daily level, both Ethereum's price and Bitcoin's price have shown a long bearish candlestick with increased volume, which is indeed unusual. Such long bearish candlesticks with increased volume have also occurred previously, and this might be the third time. If a deep correction occurs this time, it will be very beneficial for us to buy the dip or to acquire lower-priced assets. Let's see if we can seize the opportunity or if the market will give us that opportunity.
Today's overall analysis of Bitcoin and Ethereum shows a short-term rebound. In the medium term, we need to pay attention to Bitcoin's resistance levels at 96,000 and 99,000, and for Ethereum, we need to focus on the resistance levels at 3,430 USD and 3,500 USD. These are the targets for the short-term rebound.