- February 8, 2021
- Posted by: Analysis Team
- Category: Forex News
- Bitcoin pulling back after weekend sell-off.
- Ethereum volatile as futures launch.
Bitcoin (BTC/USD) continues its move higher and looks likely to re-test the January 8 record high at just under $42,000. The 20- and 50-day simple moving averages have been dictating price action recently with the late-January drop below the 20-day sma halted by the 50-day sma. Last week’s break back above the shorter-dated moving average saw Bitcoin add nearly $7,000 before consolidating over the weekend. The short-term series of higher lows and higher highs remain in place and there is little in the way of resistance before the $42,000 level. Support from a cluster of recent lows all the way down to the 20-day sma, currently at $34,740.
Popular Moving Averages and How to Use Them
BITCOIN DAILY PRICE CHART (JULY 2020 – FEBRUARY 8, 2021)
Retail trader data show 80.48% of traders are net-long with the ratio of traders long to short at 4.12 to 1.We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Bitcoin prices may continue to fall.Positioning is more net-long than yesterday but less net-long from last week. The combination of current sentiment and recent changes gives us a further mixed Bitcoin trading bias.
Ethereum continues to make new higher highs and higher lows and while Sunday’s sell-off was quite sharp, these remain in place for now. To continue this series, ETH/USD will need to print a fresh high above $1,764 which will then open up the big-figure resistance level at $2,000. Ethereum’s pattern of fresh high, sell-off, pull-back then another fresh high has repeated itself three times in the last month and is set to do the same again. Support seen between $1,475 and $1,507, while back above $1,700 sets-up an attempt at a new ATH. The driver for ETH/USD in the short-term is likely to be today’s launch of Ethereum futures on the CME. The second-largest cryptocurrency will join Bitcoin on the CME and will have a reference rate and real-time index available.
ETHEREUM DAILY PRICE CHART (JULY 2020 – FEBRUARY 8, 2021)
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