Bitcoin, Ethereum set up for potential decline

Bitcoin and Ethereum appear to be trading in oversold territory after incurring more than 10% losses in the last three days.

Bitcoin and Ethereum present buy signals

Bitcoin and Ethereum started on Monday in a negative attitude, but momentum may build for a significant upswing.

The flagship cryptocurrency has declined nearly 10% after being rejected by its 200-hour moving average on the four-hour chart. It went from trading at a maximum of $ 22,490 on July 8 to reaching a minimum of $ 20,350 early Monday morning. Bitcoin’s 100-hour moving average now acts as a stable support, which can prevent it from falling further.

The formation of a buy signal according to the Tom DeMark (TD) sequential indicator supports these optimistic prospects. The bullish formation developed as a red nine candlestick, indicating one to four candlestick upswings. If Bitcoin can hold above $ 20,450, it may have the strength to return to $ 20,900 or even $ 21,500.

Similarly, Ethereum also appears to be trading in oversold territory after experiencing an 11% correction in the same period. The second largest cryptocurrency by market value has seen the price fall from $ 1,275 to $ 1,135 over the last three days. However, like Bitcoin, there are some signs that a rebound is underway.

TD Sequential also presented a buy signal in the form of a red nine candlestick on ETH’s four-hour chart. A sustained candlestick close to $ 1,160 could help confirm this bullish formation. Should this happen, Ethereum could rise to its 200-hour moving average of around $ 1200.

Although the odds at the moment seem to favor the bulls, it is crucial to monitor the prices of Bitcoin and Ethereum as trading volumes continue to fall. A breach of BTC’s support level of $ 20,450 could trigger a drop to $ 20,000 or $ 19,375 for the best cryptocurrency. Meanwhile, ETH could fall to $ 1050 if it loses $ 1127 in support.

Disclosure: At the time of writing, the author of this piece owned BTC and ETH.