Bitcoin and Ethereum forecast for next week

Bitcoin, Ethereum – Talking Points

  • Bitcoin Turns Around After Strong Thursday Rally, Fib Support in the Crosshairs
  • Ethereum finds support around $1200, remains capped
  • The macroeconomic environment continues to drive the price

Liked by Brendan Fagan

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Bitcoin and Ethereum Outlook: Neutral

Bitcoin and Ethereum continue to trade within well-defined ranges as other risk assets remain under pressure following this week’s CPI print. Overall, risk remains under pressure as the macroeconomic outlook continues to deteriorate. This week’s positive CPI data has caused the market to reprice expectations of a Fed rate hike, further fueling fears of a potential recession.

While equity benchmarks hit new year-to-date lows in the maelstrom of price action that followed Thursday’s CPI print, both Bitcoin and Ethereum managed to remain within their well-defined channels. Subsequently, the post-CPI lows rallied in a disconcerting reversal throughout the trading session on Thursday. Bitcoin appears to be earning its title as an “uncorrelated risk asset” as it deviates from mirroring the price action of the Nasdaq 100.

Bitcoin 2 hour chart

Chart created with TradingView

Bitcoin (USDBTC)

After Thursday morning’s pre-market sell-off, Bitcoin found buyers on a dip in the support zone above $18000. As was the case with most risk assets, Bitcoin staged an impressive rally. in the second half of the session, trading above pre-IPC levels again. The strong risk-off tone on Friday saw Bitcoin give back some of those gains as the price fell towards fib support at $19225.

Bitcoin remains stuck in a defined range between $18,200 and $20,400 with neither the bulls nor the bears able to take the “kill shot” so far. Bitcoin’s inability to define a trend of late is something to watch out for as it appears to remain immune (for the time being) to the carnage in global financial markets. While it is possible that the price will ultimately head lower in the long term as we head into recession, I favor a continued short-term cut as market participants trade from one point of data to another.

Ethereum 2 hour chart

image2.png

Chart created with TradingView

Ethereum (ETHUSD)

Ethereum largely falls into the same boat as Bitcoin as it has dominated recent price action. While Thursday’s decline was much steeper in Ethereum than Bitcoin, ETHUSD firmly retraced the 7.7% IPC decline in a matter of hours. The price has traded back above the key support at $1,270, after finding buyers last week below $1,160.

Ethereum has had noticeable issues after the completion of the long-awaited network upgrade called “the merger,” and the upgrade proved to be a “sell the news” type of event. Having found its footing once again, Ethereum may attempt to test the Oct 6 high around $1385 should any deals on risky assets materialize any time soon. If the downside pressure continues, we can once again knock on the support door at $1,270.

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— Written by Brendan Fagan

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