Bitcoin, Ethereum Flash Buy Signals on Low Liquidity

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Bitcoin, Ethereum Flash Buy Signals on Low Liquidity
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key takeaways

Bitcoin and Ethereum are down more than 22% over the past month. Both coins are now showing bullish signals on their three-day charts. Still, buying pressure has yet to pick up to help BTC and ETH rally.

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Bitcoin and Ethereum have suffered heavy losses over the past month and appear to have reached oversold territory. Although buy signals are starting to appear, it makes sense to wait for confirmation given the lack of volume.

Key Supported Bitcoin, Ethereum

Bitcoin and Ethereum are showing buy signals as they trade at key support areas.

The flagship cryptocurrency has retraced nearly 22% over the past month, from a high of $48,223 to a recent low of $37,693. This support area appears to hold despite a brief dip below the 78.6% Fibonacci retracement level at $38,530. Signs of further strength near current price levels could lead to a sustained bullish impulse.

bybit

The Tom DeMark (TD) Sequential Indicator predicts that position investors may take advantage of the recent correction to re-enter the market and help BTC rally. The technical index is showing a buy signal on Bitcoin’s three-day chart, which suggests one to four candlestick gains.

If Bitcoin can hold above the $38,530 support, it could gather liquidity to validate the bullish outlook and rally towards $43,670 or even $52,000.

Source: TradingView

Ethereum has also suffered significant losses over the past month. It has retraced nearly 23% since early April, losing more than 800 points in market value. The second-largest cryptocurrency by market capitalization now appears to be approaching a key demand area that could help it bounce back.

The TD setup has flashed a buy signal in the form of an aggressive 13 on ETH’s three-day chart, and a red 9 candle is likely to appear in the next three-day trading session. These bullish patterns anticipate that upward momentum is forming. Nonetheless, Ethereum could drop to $2,700 before rebounding.

Only a decisive three-day candlestick close above $3,000 would confirm the bullish outlook. If that happens, it could encourage marginalized investors to re-enter the market, pushing Ethereum to $3,600 or even $4,000.

Ethereum price chart
Source: TradingView

Although some buy signals have begun to emerge following the sharp pullbacks seen in Bitcoin and Ethereum over the past month, the lack of volume over the past few days suggests that retail investors are not interested in entering the market at current price levels.

If the buy orders don’t pick up soon, BTC could break the $38,530 support and drop to $32,850 or $26,830, while ETH could dip below $2,700 and target $2,500 or even $2,160.

Disclosure: At the time of writing, the author of this article owns ETH and BTC.

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