and may dive further before finding support.
The central theses
- Bitcoin is down nearly 13% since March 28.
- Likewise, Ethereum has suffered more than 12% in losses.
- Both tokens are now approaching key support areas that could stem the bleeding.
Bitcoin and Ethereum are struggling to find support while traders are showing signs of optimism in the futures markets. Such market behavior could lead to a brief bounce before another fall.
Bitcoin is preparing for the leap
Bitcoin appears to be gaining momentum for a recovery after the steep correction it has suffered over the past two weeks.
The top crypto has seen a significant downturn after peaking at $48,000 on March 28. Its price fell nearly 13%, losing more than 6,000 points in market value. Despite the significant losses, market participants appear to remain optimistic.
On Binance Futures, the BTC/USDT long/short ratio has continued to rise, hitting a ratio of 2.62 on April 9th. Around 72.4% of all accounts on the world’s largest crypto derivatives exchange by trading volume are net long on Bitcoin.
Source: Binance
Although bitcoin tends not to follow the herd, the bulls could be right this time.
The Tom DeMark (TD) Sequential is currently providing a buy signal on the 12-hour chart of Bitcoin. The bullish pattern developed in the form of a red nine-candle candle, indicating a one to four candle upleg.
A surge in buying pressure could help confirm the bullish outlook and propel Bitcoin towards the $44,400 resistance level. A crucial 12 hour candle close above this hurdle could result in a more significant bounce to retest the recent high of $48,200.
Source: TradingView
Although the odds appear to be in place for the bulls, Bitcoin could still extend its losses before it rallies. The most significant leg below Bitcoin is between $41,600 and $40,000. If this support area breaks, it can trigger a liquidation cascade and propel prices to $38,000 or even $36,000.
Ethereum at a crossroads
Ethereum is consolidating within a range of $140 without giving a clear signal of its next move.
The second largest cryptocurrency by market cap has been stuck between $3,300 and $3,160 for the past three days after suffering a 12.27% correction. This price pocket doesn’t appear to be attracting outsider investors, despite the importance of Ethereum’s upcoming plans. Although the launch date is still unknown, Ethereum is currently preparing to complete the “merge” from a proof-of-work to a proof-of-stake consensus mechanism, something that fans of the blockchain have been anticipating for several years. It is expected to be delivered sometime in 2022.
The current pace of expansion of the network reflects the lack of interest. The number of addresses created daily on the Ethereum blockchain has stagnated at an average of 85,000 addresses in the past month. A sustained uptrend on this on-chain metric could lead to further price action higher as it would signal retail investor entry.
Ethereum number of new addressesSource: Glassnode
Until then, the transaction history shows critical supply and demand areas to watch out for.
IntoTheBlock’s Global In/Out of the Money (GIOM) model shows that the most significant support level for Ethereum is at an average price of $3,000, where 4.71 million addresses hold 15.58 million ETH. Meanwhile, the most significant resistance zone lies at $3,780, where 6.07 million addresses previously bought over 7 million ETH.
Source: IntoTheBlock
Ethereum needs to break support or resistance to resolve its ambiguity. Cutting through the $3,000 demand zone could see ETH drop towards $2,400. However, if the bulls break the $3,780 supply wall, prices could surge towards $4,600.
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