Weekly Technical Analysis
Dear Monfex Traders!
Here is an advanced technical analysis for Bitcoin and Ethereum based on chart patterns and technical indicators. Enjoy reading this analysis, and you’ll get a reasonable basis for making substantiated trading decisions over the next week!
Technical Analysis for Bitcoin
BTC/USD cryptocurrency pair
Based on technical analysis for BTC/USD, there are some positive signs, suggesting that the uptrend for BTC/USD is active and may continue over the week. In particular, we’ve got:
- An ascending triangle - a psychologically strong chart pattern, which was broken on March 9 when the price broke through the upper resistance forming the triangle at $3,950. What this means is that market participants have been selling BTC at $3,950 over the past two weeks, always putting a halt to rallies at the same price point, but buyers have been getting more and more bullish and were stepping in at increasingly higher prices to halt sell-offs instead of waiting for further price declines. Finally, the price broke through the $3,950 resistance. We expect this action to give new momentum to BTC/USD over the week and cause a new rally above the $4,000.
- An ascending trend channel is being formed on a daily timeframe and is already encompassing more than 30 days. The trendlines of this channel slope in an upward direction, within which the price is making higher highs and higher lows. This dynamic represents a strong continuation chart pattern and means that the continuation of an upward trend is more likely.
- Both quick (10-days) and slow (30-days) Exponential Moving Averages are increasing. EMA is a primary trend indicator. The fact that both EMAs (with short and long periods) are growing, and the BTC price is moving above the quick EMA, is positive for BTC/USD.
- Stochastic oscillator (5,3,3), plotted on a daily time-frame, has approached an overbought range. This means that a small retracement downwards is possible, after which the prevailing medium-term trend is going to continue upwards.
Since the price has broken through and above the $3,950 resistance, we believe that BTC/USD is set to further growth and the continuation of uptrend should be expected. A variety of technical indicators and chart patterns, mentioned above, confirm our opinion and indicate that BTC/USD may gain momentum over the next two weeks.
Technical Analysis for Ethereum
ETH/USD currency pair
On a daily chart, ETH/USD seems to be set to steady growth over the next two weeks. Technically, we’ve got two patterns: an ascending trend channel and an ascending triangle. Each of these patterns represents a continuation chart pattern and indicates that an uptrend should be expected.
In particular, there is an upward trend channel on a daily chart. The trendlines of this channel slope in an upward direction, within which the Ethereum price is making higher highs and higher lows. This is a continuation pattern that confirms an upward trend.
Also, there is an ascending triangle, as shown on the chart. The trendline connecting the high prices is horizontal at $144, and the trendline connecting the low prices forms an uptrend. What this pattern means is that market participants have been selling ETH at $144 over the past two weeks, always putting a halt to rallies at the same price point, but that buyers are getting more and more bullish and stepping in at increasingly higher prices to halt sell-offs instead of waiting for further price declines. We know that an ascending triangle typically forms in an uptrend. If the rally continues above the $145 (beyond the triangle), that will give new momentum to ETH/USD over the week and will drive the price higher.
Besides, we have a series of confirmatory signals from technical indicators. On a daily time-frame, the Stochastic oscillator (5,3,3) is growing, and the %K line is moving above the %D line. This confirms an upward trend.
Importantly, there is another one significant ascending triangle, restricted from above by the resistance at $165. As the triangle has been forming over the past three months, each rally ceased at a higher and higher low price point, suggesting the buying demand is exerting greater price influence than selling demand over the medium-term.
This indicates that the buyers will most likely challenge the $165 resistance once again and, possibly, the price will break through it. We know that the longer the triangle pattern persists, the more volatile and sustained the subsequent price movement is likely to be! If the price breaks through and above the $165 resistance - the continuation of an uptrend should be expected.
We hope this analysis was useful to you!
If you have any feedback, please contact us at [email protected].
To your trading success,
Research Team at Monfex
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