Bitcoin and Ethereum forecast for the week ahead

Bitcoin, Ethereum – Talking Points

• Bitcoin rolls over after a robust Thursday rally, saw Fib support
• Ethereum finds support around $1200, remains limited
• Macroeconomic environment continues to drive the price

Bitcoin and Ethereum Outlook: Neutral

Bitcoin and Ethereum continue to trade within well-defined ranges as other risk assets remain under pressure following this week’s CPI print. Risks remain broadly under pressure as the macroeconomic outlook continues to deteriorate. The hot CPI print this week has led to the market once again reviving expectations of a Fed rate hike, further fueling fears of a potential recession.

While equity benchmarks made fresh YTD lows in the maelstrom of price action that followed Thursday’s CPI print, both Bitcoin and Ethereum managed to stay within their well-defined channels. Lowers following the CPI were then bought up in a confusing reversal through all risks during Thursday’s session. Bitcoin appears to be earning its title as an “uncorrelated risk asset” as it deviates from mirroring the price action of the Nasdaq 100.

Bitcoin 2 hour chart

Chart created with TradingView

Bitcoin (BTCUSD)

After Thursday morning’s pre-market sell-off, Bitcoin found buyers deep in the support zone above $18,000. As was the case with most risk assets, Bitcoin staged a stunning rally in the latter half of the session, trading back above pre-CPI levels. Friday’s strong risk-off tone saw Bitcoin give back some of those gains, as the price fell towards fib support at $19225.

Bitcoin remains stuck in a defined range between $18,200 and $20,400, with neither bulls nor bears able to take the “kill shot” so far. Bitcoin’s inability to define a trend lately is something to note, as it seems to remain immune (for now) from the carnage across global financial markets. While the price may ultimately be headed lower in the longer term as we head into recession, I still favor cuts in the short term as market participants trade from data point to data point.

Ethereum 2 hour chart

Chart created with TradingView

Ethereum (ETHUSD)

Ethereum falls largely in the same boat as Bitcoin, in that chop has dominated the recent price action. While Thursday’s decline was much stronger in Ethereum than Bitcoin, ETHUSD recouped the 7.7% CPI decline within hours. The price has traded back above key support at $1,270, after finding buyers below $1,160 last week.

Ethereum has particularly struggled following the completion of the long-awaited network upgrade called the “merger”, with the upgrade proving to be a “sell the news” type of event. Having found its feet again, Ethereum could look to test the October 6 swing at around $1,385 should any risk asset bids materialize in the near term. Should bearish pressure continue, we could go back to knocking on the door of support at $1270.

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— Written by Brendan Fagan

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