The price of Bitcoin has rallied nearly 17% in the past 24 hours. Likewise, Ethereum reclaimed $2,000 as support after trading as low as $1,700. Nonetheless, both BTC and ETH are now facing stiff resistance.
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Bitcoin and Ethereum kicked off Friday’s session on a positive note. While the technicals show a bullish signal, caution is advised until a clear resistance breakout occurs.
Bitcoin and Ethereum bounce back
More than $30 billion has flowed into the cryptocurrency market over the past 24 hours, sparking a massive rally in most digital assets.
Bitcoin rallied from $26,660 to $30,000 as support. The sudden uptick came as a surprise to many as investors remained concerned about the stability of the stablecoin market after Terra’s UST crash. Still, the flagship cryptocurrency seems poised for further gains.
The Tom DeMark (TD) Sequential indicator is showing a buy signal on Bitcoin’s daily chart. The bullish pattern developed into a red nine candlestick, which indicates a rise of one to four daily candlesticks. To confirm the bullish outlook, BTC must break above the $31,225 resistance.
A breakout of such a key resistance area could encourage wait-and-see investors to re-enter the market, pushing Bitcoin to the next area of interest near $35,000.
Ethereum also seems primed for a bullish impulse after a U-turn at the $1,700 support. The second-largest cryptocurrency by market cap has gained nearly 450 points in the past 24 hours, and TD Sequential expects more upside. The technical indicator flashed a buy signal on ETH’s daily chart after reaching oversold conditions.
Notably, the $2,260 to $2,500 price range could act as a stiff resistance level for Ethereum. While the technicals anticipate further gains, ETH must clear this level to confirm the bullish outlook. If successful, ETH could rise to $2,700 or even $3,000.
While the cryptocurrency market appears to be gaining momentum for a relief rally, it is important to understand that Terra’s death spiral has created a great deal of uncertainty, the impact of which may not be fully understood. As fear spreads, market participants may be encouraged to take advantage of a potential rally to close their positions. The sharp spike in selling pressure could put the cryptocurrency at risk of another decline.
In this unique situation, investors should watch for a sweep of recent lows, which could take Bitcoin to $21,000 and Ethereum to $1,400.
Disclosure: At the time of writing, the author of this article owns BTC and ETH.
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