Price Analysis (12 February): The high levels are here for Bitcoin and Ethereum

News • 2021/02/11 • by

Bitcoin / US Dollar

The price has remained at high levels, touching the $48,000 point and giving out a steady perspective for the market’s future. The established high levels are often followed by a short-term correction when many investors are trying to capitalize on their profits and liquidate their positions. This fallback is considered normal for the majority of occasions, indicating that when the correction is happening, the market is “clearing out” of investors that believe the market has reached a dead end.

Once those investors are out of the market, the path is clear for new high levels, as other investors will find the asset at discount and will be willing to enter the market, hoping for better future results. We believe that in the next period, we will experience this kind of correction, which might last up to 40 % down of the all-time high level. This means that the price might drop even at the $30,000 point.

We have pointed out that the $30,000 point was a crucial barrier for the market as many institutional investors have entered the market with multiple positions, creating large market depth and making it impossible for the price to drop at lower levels. The same thing happened this time with Tesla, whose buy order around $37,000, created another protective wall for Bitcoin.

As we describe above, we expect a minor correction from the current price levels for Bitcoin. But, as we have been through this situation many times in the past, Bitcoin could explode out of nowhere and create a new bullish trend. The trading volumes have been sustained at normal levels for the bullish trend while the moving averages are at bullish formation.

In the short-term diagram, we can observe that the trend has overcome the previous compression zone between $30,000 and $36,000 and developed a healthy trend towards the new all-time high level. This pattern has been repeated many times in the past and many analysts have found that a new all-time high level was possible to be achieved.

Indicators

MACD index has been sustained at positive levels, indicating that there is momentum in the market to fuel the current price levels. The RSI index lays in the “overvalued” zone, indicating that a correction might be evident in the next period.

Ethereum / US Dollar

Ethereum has a steady positive outlook for the price formation, leading the price to around $1,800 and creating a constant movement in the market. The coin is achieving a new all-time high level every day, making more and more investors believe in it and trying to extract the most out of it.

This situation is also critical for Ethereum as it will face the same problem with Bitcoin, that we mentioned above. A part of investing community will be happy with its current profitability and they are willing to liquidate its positions in the market. Although Ethereum has not achieved the same adoption rates from institutional investors like Bitcoin, it has developed itself as a viable alternative option for this kind of investor.

We expect that Ethereum will continue its positive route until there is a major move in the crypto market that will shake up the current status and bring new data on the block. The trading volumes have been at higher levels than usual for Ethereum while the moving averages have sustained a bullish perspective for the market.

Indicators

MACD index is falling during the last days but remains on the positive side, indicating that the bulls are evident on the market. The RSI index remains around value = 65, indicating that the trend has not reached its full potential and there is more to be done in the market.

Ripple / US Dollar

Ripple continues to surprise everyone in the crypto market as, under no technical or fundamental reasons, its price continues to surge and create value for its holders. This time, the price climbed at $0.59, creating a new bullish trend in the short-term horizon. This move can be explained through an altseason break-out, that could take place in the next period.

An altseason is often taking place when altcoins are creating excessive returns over Bitcoin or other major coins like Ethereum. At this period, Bitcoin and Ethereum have reached a local high level. This means that some more aggressive investors are actively looking for new opportunities with higher profit margins. Those margins could be found at other altcoins, pushing investors at buying them at lower prices and rising them in a short-term period.

We believe that something like that is happening in the Ripple market, making it perfect for short-term trading, as we have mentioned several times in the PA articles.
The trading volumes have made a progress at retaining a positive surge while the moving averages have been formed a bullish position that holds the trend for now.

Indicators

MACD index is growing for the last four days, creating positive momentum in the market while the RSI index passed on the “overvalued” area, indicating that a correction is possible to happen in the next period.

Litecoin / US Dollar

Litecoin officially joins the bullish trend, breaking the previous local high level around $180 and heading towards the $190 point. By breaking the previous high level, Litecoin is making a strong statement about its potential for the next period and indicates that the next goals are pretty clear.

We believe that an alt-season will bring Litecoin to higher levels, first around the $200 and then, towards its all-time high level around $240. This trend should be approved by the rest of the market as Litecoin has no fundamentals that could shape its price. The market dynamics will bring the price in the “right” position, shaping the next trend or continuing the existing one.

The trading volumes have remained on the normal levels for Litecoin’s bullish case and the moving averages are confirming that Litecoin has been at a bullish period for now.

Indicators

MACD index continues to grow during the last days, making the momentum to work for Litecoin and create greater perspectives for the market. The RSI index has just reached value = 70, indicating that a bullish cycle might be complete and a correction is possible from now on.

Bitcoin Cash / US Dollar

Bitcoin Cash has continued to follow Litecoin’s case, landing at $550 and bringing more positive momentum with it. There is an important difference between Litecoin and Bitcoin Cash in this case, as Bitcoin Cash has not reached its local high point yet, around $600, a crucial point for the price development.

The price development will be formed from market dynamics and how strong those be in terms of alt-season or mild approach at Bitcoin’s major trend. We expect to see more of those moves shortly, predicting a more integrated market with definite leaders and followers.

The trading volumes have made a spike during the last days, highlighting investors’ interest in the coin while the moving averages have formed a bullish development during the last week.

Indicators

MACD index is growing for the last week, indicating that positive momentum has been sustained in the price formation. The RSI index surged around value = 65, showing that the price has not reached its full development yet. This possibly will happen when the price reaches the $600, the local high point.

Correlations

Bitcoin / Ethereum = 0.92 (+ 0.01), Bitcoin / Ripple = 0.80 (- 0.11), Bitcoin / Litecoin = 0.97 (+ 0.02), Bitcoin / Bitcoin Cash = 0.92 (+ 0.06)

The correlations have never been more integrated in the bullish period, indicating that the market is trying to make a cohesive move towards the same direction. This also means that investors are trying to get a unique approach in the market formation, pushing all the prices at higher levels.

We can highlight that Ethereum and Litecoin have sustained the same levels of correlation while Bitcoin Cash had a small increase over the last few days, trying to join the major bullish trend. The decline in the correlation between Ripple and Bitcoin can be explained as Bitcoin remains stable while Ripple is trying to establish a new trend in its market, with a more bullish outlook.