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Bitcoin and Ethereum Market Analysis – 20.05.2021

Bitcoin suffered its worst daily drop in over 14 months on Wednesday 19th,2021 as BTC flushed below that key level of 42k we had been watching, all the way down to 30k. There is panic in the market and major volatility, and at the moment even with the recent bounce, bears have the edge.

The extent of the fall shows that many large traders may have dumped their positions and leverage traders may have been roasted. The massive fall today is likely to scare several institutional investors and delay their entry into the space. Although there will be periodic rebounds and sharp bear rallies, the next bull run may not start in a hurry.

Weakness wasn’t just isolated to BTC, but felt throughout all cryptocurrencies in one amplified move. This was a pronounced market-wide reaction that wiped out about US$1 trillion from the total crypto market cap. So where does this leave Bitcoin and Altcoins like Ethereum, Litecoin from a technical perspective? What could traders expect in the event of deeper losses?

BTC daily chartshows a complete bearish head and shoulders pattern. The selling picked up momentum and turned into capitulation as the BTC/USDT pair plunged to $30k, exceeding the H&S pattern target at $31,653.73.

Generally, after such a sharp fall, a pullback can be expected because traders who initiated short positions at higher levels may book profits and aggressive bulls may have purchased near the critical support at $30k.

The long tail on the candlestick suggests strong buying on dips but the rise from the current levels may not be easy because the bulls are likely to encounter massive supply at the neckline. If the price turns down from this resistance, the pair could consolidate in a large range between $30k and $42k for the next few days or even weeks.

Pic.1: BTC/USD showing a complete bearish head and shoulders pattern.

Source: Paid Content by Peter Brendt and his partners at bitcoin.live

Looking at the BTC weekly chart, Bitcoin slipped below the 20-week EMA for the first time since February 2020, which is a big bearish signal.

Bitcoin bulls may be even facing aggressive downside market corrections in the sessions ahead, especially as the benchmark cryptocurrency breaks below a critical support level-42k.

Bulls need to get back above 20 week EMA, as well as re-capturing 42k as soon as possible.

For now, the bears have an edge.

Pic.2: BTC/USD slipped below the 20-week EMA for the first time since February 2020. Source: bitcoin.live

Ethereum
What a flush, a full $1000 below the level I thought was a low ball bid at $2800. Ethereum has had relative strength, so it is still trading above the MA 200, and I would be looking to BTD again on any sub $2k dip.

This fall has pushed the relative strength index (RSI) deep into the oversold territory for the first time since March 2020.

Prepare yourself for any outcome, the decline could extend to the next support at $1985.
I see a rebound off the current level-$2.5k and rises above $2,800, the bulls may try to push the price to $3,195.98 support resistance.

Pic.3: The RSI deep into the oversold territory for the first time since March 2020. Source: bitcoin.live

Top Takeaways
$BTC 30k area support / 42k area resistance
$ETH $1985 area support / MA 50 area resistance

🔴This Market Update is created using Paid Content by Peter Brendt and his partners at Bitcoin.live. Peter Brendt is a Trader since 1975. Author and publisher of the Factor Report as well as Best Selling Trading Books. If you want to read full content by him and his partners, trading signals/calls in real time, daily/weekly/monthly reports, trading videos and podcasts, trading tips check out his VIP Subscription Service


🔴This Market Update is created using Paid Content by Peter Brendt and his partners at Bitcoin.live. Peter Brendt is a Trader since 1975. Author and publisher of the Factor Report as well as Best Selling Trading Books. If you want to read full content by him and his partners, trading signals/calls in real time, daily/weekly/monthly reports, trading videos and podcasts, trading tips check out his VIP Subscription Service