Bitcoin and Ethereum Technical Outlook: Have They Run Their Course?

BITCOIN SHORT-TERM TECHNICAL OUTLOOK – NEUTRAL

Bitcoin’s rebound has run into tough resistance, raising the risk of a retreat, or possibly a retest of the June low.

BTC/USD has maintained a gradual drift higher in recent weeks, nicely guided by an upward-sloping channel from September. The top end of the channel is an uptrend line (now at 21250) while the lower edge of the channel is another uptrend line (now at 18950). The top end also coincides with the 89-day moving average – the rebounds in August and September were capped by the moving average.

The two-steps-forward-one-step-back kind of recovery, similar to the corrections since mid-2022, means the current rebound is not any different from the previous dead-cat bounces. That is, those minor rallies were corrective, rather than a start of a new uptrend.

BTC/USD Daily Chart

For the downward pressure to fade, BTC/USD would need to rise above key converged resistance on the 200-day moving average (now at about 23770) and the August high of 25201. Until then, the path of least resistance is sideways to down. Interim resistance is at the September high of 22774.

From a half-glass-full perspective, the rise since September could well be part of the broader base-building process, typically classified by retests of the lows and fragile/choppy rebounds. In this regard, BTC/USD needs to hold above the June low of 17590 for the base-building view to remain intact. Immediate support is at Thursday’s low of 20040. Any break below the support would indicate that the short-term upward pressure had eased.

ETHEREUM SHORT-TERM TECHNICAL OUTLOOK – NEUTRAL

A negative momentum divergence (rising price associated with declining momentum) on the daily charts raises the odds that Ethereum’s recent rally may have run its course.

ETH/USD’s three-week-long rally is testing quite strong resistance on the 200-day moving average, not too far from another ceiling at the September high of 1790. Also, as noted in the previous update, ETH/USD has achieved the price objective of the horizontal channel that got triggered at the end of October.

ETH/USD Daily Chart

Any break below last week’s low of 1502 would trigger a minor double top (the October 29 and the November 6 highs), implying a potential fall towards 1350. However, there is strong support at the September-October lows of around 1193-1220.