Bitcoin, Ethereum Rally Hits Roadblocks: What’s Next?

• Selling off in the cryptocurrency market continued into the new week, with Bitcoin and Ethereum under pressure.
• Bitcoin’s rally from last week was halted as Ethereum tested a key support level after coming under selling pressure.
• Upcoming US CPI data will be crucial in determining both cryptos’ next direction.

Heavy selling in cryptocurrency markets over the weekend spilled over into the new week. Despite moving up last week within the ascending channel, it struggled to overcome critical resistance and started trading below the short-term channel. Meanwhile, it faced a decline, approaching a support region it has relied on recently after facing strong selling pressure around the $2,000 level.

Bitcoin’s upward trajectory during the week was fueled by increased demand as it reached the lower end of the rising channel. However, buyers failed to push the price beyond the $30,000 level, which coincides with the midline of the channel. The bearish sentiment over the weekend was reinforced by BTC network congestion and Binance’s suspension of withdrawals.

BTC broke below the lower limit of the channel it held last week, signaling further losses could be around the corner. The current outlook suggests that BTC is likely to test the $26,500-$27,000 range, which serves as a support area this week after previously serving as resistance.

This area is decisive, supported by the Fib 0.382 value and the 3-month EMA level, in line with the recent uptrend. Breaking this level could see BTC fall towards $24,100 (Fib 0.618) and then $22,350 (Fib 0.786). To maintain the overall uptrend, it is important to stay above $24,000, especially during the ongoing decline, according to the daily outlook.

On the other hand, a daily close above the short-term EMAs in the $28,600 area this week could trigger a quick recovery in the cryptocurrency. Regaining this area would mean BTC returning to its short-term bullish channel and a quick rise towards the $30,000 band could be seen again.

The US data will be closely watched this week. Bitcoin’s next move depends on the data. Inflation in the US is expected to remain stable on an annual basis. In the event of a decline, BTC may recover in the second half of the year.

This may be due to increased demand for risk assets and that the pressure on the Fed to tighten monetary policy will ease somewhat. Additionally, if inflation comes in higher than expected, BTC will fall.

Ethereum is trying to maintain its upward momentum

Ethereum rose as high as $2,100 halfway through last month, but entered another correction phase after that.

Ethereum, which lost momentum in the 2023 uptrend, is currently testing a critical support level this week. After falling to an average of $1,840 on April 21, Ethereum experienced an upward rally from this point, but the $2,000 region has become a selling point.

The recent decline in Ethereum once again brought the support at $1,840 (Fib 0.382) into focus. If there is a daily close below this region, it may indicate a breakout from the trend. If so, we may see ETH pull back towards the 3-month EMA and the Fib 0.5 zone at $1750.

Breaking the $1,660 support level (Fib 0.618) could signal a potential move towards Ethereum’s $1,500 area.

However, if Ethereum traders can keep the cryptocurrency’s price above $1,840, it could pave the way for another move higher before support levels become significant. To sustain this upward momentum, a clear daily candle close above $1,950 is required. Meeting this condition will allow ETH to surpass $2,100 and set its sights on the $2,300 region.

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Disclaimer: This article is written for informational purposes only; it is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation, advice, counsel or recommendation to invest. We remind you that all assets are assessed from different perspectives and are extremely risky, so the investment decision and the associated risk is the investor’s own.