Bitcoin and Ethereum Market Analysis: Trading Strategies and Price Patterns

Bitcoin Market Analysis

Bitcoin is currently forming a significant pattern on the two-day timeframe. Let's examine the current trading strategy and how Bitcoin and Ethereum are repeating historical patterns in the short term.

Four-Day Bitcoin Chart Analysis

On the four-day Bitcoin chart, we've recently confirmed a bearish signal. The trend is technically looking more bearish, forming lower highs and lower lows. However, it's important to note that even during a bearish trend, we can see upward price movements.

This bearish trend will only be invalidated and turn bullish again if we see a confirmed breakout above the resistance line at around $68,500 to $69,000. Ideally, a breakout above $70,000 would set a new higher high in Bitcoin's price.

If we see daily or two-day candle closes above the resistance line just under $69,000, it would set up a massive bullish price target for this pattern. However, as of now, this breakout hasn't occurred, meaning we're still technically within a bearish trend.

Key Support and Resistance Levels

A few days ago, we saw a perfect bounce from the descending line of support, sitting just under $54,000. This bounce coincided with oversold conditions in the daily Bitcoin RSI, which was mentioned as a potential catalyst for a relief rally.

Over the last few days, we've indeed seen a bullish relief, but it's crucial to remember that this has reset the RSI out of oversold territory. The RSI is now sitting at more neutral levels, which technically gives more room to the downside compared to a week ago.

We've seen similar patterns before, such as in late June to early July, where the RSI entered oversold territory, followed by a sideways consolidation that reset the RSI to neutral levels before further downside movement.

Short-Term Price Action

On the daily Bitcoin chart, we've seen a decent bounce from the major support area between $51,000 and $53,000 over the last few days. We also have support between $56,000 and $57,000 based on previous price action.

Recently, we've seen a slight breakout above the resistance area between $60,000 and $61,000, which was previous support. It would be a short-term bullish signal if Bitcoin can hold above this area and find new support between $60,000 and $61,000.

However, if we see a break to the downside with daily candle closes below $60,000, we have major support based on previous price action between $56,000 and $57,000.

Other resistance levels to watch include:

• Around $63,000, based on high trading volume
• Between $67,000 and $68,300

Comparison to March 2020 Crash

Looking at the 4-hour Bitcoin chart and comparing it to the bottom of the COVID-19 crash in March 2020, we can see many similarities between the current price action and what we saw back then.

This similarity has been one of the main reasons for entering long positions on Bitcoin over the last few days. These trades have been shared transparently on the channel.

Current Trading Strategy

As for the current trading strategy, most of the long position has been closed, with profits taken off the table. A small part of the long position remains open in case of continued upward movement.

This creates a win-win scenario:

1. If the price pumps, there's still potential for profit from the remaining long position.
2. If the price dumps, a decent amount of profit has already been secured, and the stop-loss is set above the entry point in profits.

It's worth noting that these trades are being made using the BTC/USD contract, which pays out in Bitcoin and uses Bitcoin as margin. This means the strategy is turning Bitcoin into more Bitcoin, rather than selling into stablecoins.

Liquidation Heat Map

The Bitcoin liquidation heat map shows a decent amount of liquidity sitting close to $70,000. However, there are major resistance levels between the current price and $70,000 that need to be considered.

Shorter-term liquidity levels to watch:

• Upside: Around $62,800 and $65,700 to $66,000
• Downside: Small amount at $57,500 to $57,800, and more at $54,000 to $54,300

Funding Rates

Currently, Bitcoin funding rates are below neutral (0.01%) across multiple exchanges. This is generally considered a bullish signal in the short term.

Ethereum Market Analysis

Weekly and 3-Day Timeframes

On the weekly timeframe, Ethereum is still showing a major bounce from the critical support area between $2,000 and $2,150, aligning with an ascending support line.

On the 3-day timeframe, we recently saw a significant bounce near the golden pocket area of support between $2,150 and $2,200. There was also a bounce close to the 50% retracement level at around $2,500.

A significant resistance level based on previous support and resistance sits close to $2,800.

Short-Term Price Action

On the 4-hour timeframe, Ethereum is showing similar price action to what we saw at the bottom of the March 2020 crash. The RSI on this timeframe is not yet overbought, suggesting there's still room for upward movement.

However, once the RSI approaches overbought territory, it could signal a short-term pullback, similar to what occurred during the bullish relief in March 2020.

Solana Price Analysis

Solana is currently trading within a massive sideways price range:

• Support: Between $120 and $128
• Resistance: Between $183 and $187

Additional levels to watch:

• Support: $140 to $144, and $153 to $154
• Resistance: $158 to $162, $170 to $175, and $183 to $187

Trading Opportunities and Risk Management

It's important to note that these market analyses and trading strategies are shared for educational purposes. Always conduct your own research and manage your risk appropriately when trading cryptocurrencies.

Remember that even in choppy, sideways price action, there can be opportunities for profit. However, it's crucial to understand the risks involved and to use proper risk management techniques.

Conclusion

The cryptocurrency market continues to show interesting patterns and potential trading opportunities. Bitcoin and Ethereum are both at critical junctures, with historical patterns potentially repeating. Solana remains in a sideways trading range, offering potential opportunities for range-bound trading strategies.

As always, stay informed, manage your risk, and never invest more than you can afford to lose in the volatile world of cryptocurrency trading.

Article created from: https://youtu.be/KP8xTdcOoBQ?si=a6LgsA3WPsjBP3ig