Short-Term Crypto Price Action Remains Bullish Into Challenges
- By Robin Wilkin
- 2 min read
Macro vs Technicals
The macro environment remains complicated, with little clarity on the impact of the banking crisis on the central banks fighting inflation. While inflation has been falling, it has mostly been due to base effects – core remains strong, as Dominique has pointed out.
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Macro vs Technicals
The macro environment remains complicated, with little clarity on the impact of the banking crisis on the central banks fighting inflation. While inflation has been falling, it has mostly been due to base effects – core remains strong, as Dominique has pointed out. While the Fed are expected to hike again and then pause, the market is swinging (wildly at times) between that outcome and the Fed having to cut significantly by yearend. We have a challenging two weeks ahead, with the US employment report being released on Good Friday then the latest CPI update the following Tuesday in likely a far less liquid environment. So far, the price action in crypto remains bullish.
Ethereum vs Bitcoin
The ratio has sat in a range for the last week, consolidating the recent downside breakout of the triangle, after reaching first Fibonacci support around 0.063. This ‘flag’ type consolidation is expected to give way to another leg lower towards monthly trend support in the 0.0609 region, with the risk of an overthrow to Fibonacci support in the 0.057 region. However, the broader studies suggest monitoring that lower area for signs of a base and reaction back higher. A direct move now back through 0.067 would negate downside risks and take us back into the previous range environment.
Bitcoin
Prices attempted to break higher this week but have so far failed. That leaves us in an ongoing consolidation phase. My underlying studies remain bullish, and I have dropped into the chart my trend envelope which has upper support at 27,500 and lower support at 25,450. That lower level is also the pivot and breakout support region. Pullbacks are expected to remain choppy and corrective, and the underlying view is bullish while over 24,500-23,900 support within the medium-term outlook.
From a medium- to long-term perspective, the bear cycle from the 2021 highs completed last year at 15,574. We now look to be in a new bull phase, so around the short-term views above we should head up to next targets around 33,000 and then onto Fibonacci targets above there around 36,000.
Ethereum
As with Bitcoin, prices have been in a choppy correction phase after the recent aggressive rally to ~1850. Short-term studies have unwound somewhat, which risks an early upside break. But for now, we are holding under 1858/1860 resistance. The price action is viewed as correction with support now between 1710 and 1670. While this region holds, we should see a break higher as part of the bigger picture C wave rally targeting ~2400/2450.
An impulsive (5-wave) decline through 1670 would be the first warning this bullish outlook is wrong and risk a deeper setback towards the March 1370 reaction low. A subsequent break there would negate the overall bullish outlook and turn us back into the wide medium-term range environment since June last year.
From a long-term perspective, the decline from the 2021 high at 4866 completed a bear cycle at 880 in June 2022. Ideally, we should see prices build on the recent rally phases as highlighted above.