Offer for a busy weekend

Bitcoin, Ethereum, BTC / USD, ETH / USD Talking Points:

  • While many / most markets close on the weekend, the crypto space is not sleeping and with Ethereum futures going online next week, this could turn into a busy weekend in cryptocurrencies.
  • Ethereum launched higher this week, setting a new all-time high for that futures listing.
  • Bitcoin was also strong, albeit to a lesser extent than Ethereum’s. Perhaps most impressive was Bitcoin’s continued strength, even as the US dollar came back to life.
  • The analysis in article is based on price promotion and chart formations. For more information on price action or chart patterns, check out our Finance Prop Education section.

The crypto space continues to evolve, and next week marks another important point on that timeline when Ethereum futures contracts go live. Ahead of the stock exchange listing, Ethereum rallied throughout the week to continuously move towards even higher all-time highs. Right now, Ethereum is up more than 130% in 2021 alone, and we’re barely a month into the new year.

Perhaps more impressively, the cryptocurrency is up a whopping 1,859% from its March 2020 lows and a whopping 473% from its September lows. Bitcoin has had its days in the sun, of course, but the numbers don’t compare to Ethereum, and this can be seen in the continued decline in the Bitcoin / Ethereum spread, which dropped to a new low in two years earlier this week. and has been lower much of the time since its peak in September 2019.

Bitcoin / Ethereum highlights the growing presence of Ethereum in the Crypto space

Bitcoin vs Ethereum

Chart prepared by James Stanley; Bitcoin / Etherum on Tradingview

Ethereum is jumping to a new high

At the start of this week, Ethereum had already spent two weeks testing resistance against its earlier all-time high, which was set in 2018 at a price of $ 1,420.00. That level has been tested each for the past two weeks, but this week the bulls accelerated to push the market all the way past $ 1700.

The new high, plus the big change next week with the listing of Ethereum futures contracts, presents a significant change and potential turbulence to deal with. There is no sign yet that this outbreak is reversing; but traders would probably want to stay cautious as whenever something this big changes in a market, the range of possible outcomes shifts in the same way to a much wider potential.

Ethereum Weekly Price Chart: Accelerating to New All-Time Record

Ethereum ETHUSD

Chart prepared by James Stanley; Ethereum on Tradingview

Should Ethereum withdraw, there may be an opportunity for analysis to enter the equation. The earlier batch of resistance, from approximately 1,420 to 1476, could be considered as potential support, as derived from previous resistance.

Ethereum four-hour price chart

Ethereum ETHUSD four-hour price chart

Chart prepared by James Stanley; Ethereum on Tradingview

Bitcoin is bouncing even as USD strength starts to show

Despite its lackluster performance compared to Ethereum this week, it was also a strong week for Bitcoin, even as the US dollar showed its own strength. Bitcoin hit a new three-week high on Thursday morning before withdrawing. That high hit a familiar spot on the chart, around the same 23.6% Fibonacci retracement that helped spark resistance late last week. That Fibonacci retracement comes from the big step in 2021, which will bottom out from January 4th up to the high set on January 8th.

The 38.2% mark of the same retracement also helped gain support on Thursday after showing resistance on Tuesday; and this set of levels is shown in green in the table below.

Eight hour Bitcoin price chart

Bitcoin BTCUSD eight hour price chart

Chart prepared by James Stanley; Bitcoin on Tradingview

The stance around resistance and not retesting the 40,000 handle after Thursday’s bow are both non-bullish factors; but the door remains open to strength, especially when that high around the 23.6% Fibonacci retracement is retested. A recurring test and breakthrough to a new high opens the door to breakthrough potential in the 40,000 handle; and if buyers can keep pushing, the all-time high at 42,000 remains vulnerable.

The pace of recent higher lows coupled with horizontal resistance provides an ascending triangle formation, which will often be approached with the aim of bullish breakout potential. For more information on that formation, visit Finance Prop Education.

Eight hour BTC / USD price chart

Bitcoin BTCUSD eight hour price chart

Chart prepared by James Stanley; Bitcoin on Tradingview

— Written by James Stanley, Senior strategist for Finance

Get in touch and follow James on Twitter: @Jndkgrf

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Categorized as Forex

By Jonathan Prop

Jonathan Prop is an independent financial advisor. He has been working in finance for the last 20 years. After retiring early in his 40s, Jonathan decided to help others get to grip with financial markets, particularly his area of expertise - forex!

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