The crypto market has been quite depressed lately and has left many wondering whether to hold and wait it out, or trade and make some money from the volatility. Whatever decision you take will reward you well in the long-run if you play your cards well.
That’s because the long-run trajectory of the crypto market is still upwards, going by the increased levels of adoption in the last few months. But if you choose to trade, you can still make a good amount, with coins like Bitcoin and Ethereum. Let’s explore the various trading opportunities that these two coins have to offer.
Bitcoin technical analysis
On the day chart, bitcoin looks like a good potential buy. It opened the day above the previous day’s close, amid surging volumes. This is an indicator that buyers are coming in, to take advantage of the drastic price fall that happened over the weekend. Entering at this price level gives you the potential to profit as the price rallies towards $9500, a price level that might act as a point of resistance, at the 30-day moving average.
On the weekly chart, the story is a bit different. Bearish sentiment seems to be confirmed by the bearish engulfing bar that was followed by last week’s bar, which opened low and closed lower.
To go long, you would have to wait for the price to close above the $10,000 price level. This will be an indication that the bulls are taking the market. If bitcoin closes the week below $9,800, it would be ideal to enter short positions. That’s because, it would indicate that there are not enough bulls in the market to push the price further up.
Ethereum price analysis
In the day chart, Ethereum looks like a pretty good buy. Yesterday’s bar is an indication of a rejection of the downtrend after price dropped below $500, but closed at almost the same level that it opened.
This is an indicator that there is strong bullish momentum in the market right now. It shows that bulls have the market. If it sustains, there is a chance that price will get back to over $800, which is a psychological price level where it might experience some level of resistance.
On the weekly chart, the price opened below the 30 day moving average, after two weeks of sustained drops. At current prices, Ethereum will have to break above $600, for there to be any hope of it continuing upwards. However, for you to make a low risk long entry, it would be better to wait until the price closes above $750, which is above last week’s opening. If it closes lower, it will be an indication that there is not enough buying momentum to sustain the uptrend. This would then make any price below that a perfect entry point for a short position
Verdict
Overall, the market is still quite volatile right now. If you are looking to trade actively, it would be advisable to lower your level of exposure as much as possible. Opening up large positions can wipe you out, in case of sudden reversals.
The fact that both price charts suggest different directions on different time frames confirm that the market is difficult to read. The longer time frames are seen as a better confirmation of direction, however the shorter time frames can give you better entries and better rewards. The decision ultimately comes down to your risk appetite, those that have a higher risk tolerance may be inclined to enter the market long based on the daily chart.
Disclaimer: This content is for information purposes only and is not intended as financial advice or any other advice. It is not an offer or solicitation to buy or sell nor is it meant as an endorsement or recommendation for any security. The information is general in nature and does not take into account your individual financial position. You should seek advice from a registered professional investment adviser and undertake due diligence before making investment decisions.