Main Points
- In the past three days, the prices of Bitcoin and Ethereum have fallen by more than 10%.
- On their four-hour charts, both cryptocurrencies are currently displaying buy signals.
- BTC could reach $21,500 due to increased buying pressure, and ETH could reach $1,200.
Following three days of losses totaling more than 10%, Bitcoin and Ethereum appear to be trading in oversold territory.
Buy Signals are Present for Bitcoin and Ethereum
Although Bitcoin and Ethereum started the week in a bearish mood, there are signs that a significant rebound may be in the works.
After being rejected by its 200-hour moving average on the four-hour chart, the leading cryptocurrency has reversed nearly 10%. It reached a low of $20,350 early on Monday morning after reaching a high of $22,490 on July 8. The 100-hour moving average of bitcoin is now serving as steady support, which might stop it from falling any lower.
This upbeat outlook is supported by the Tom DeMark (TD) Sequential indicator, which has formed a buy signal. The red nine candlestick, which denotes an upswing of one to four candlesticks, was the first sign of the bullish formation. If Bitcoin can maintain its position above $20,450, it may have the momentum to move back up toward $20,900 or even $21,500.
After experiencing an 11 percent correction during the same time period, Ethereum also seems to be trading in oversold territory. Within the past three days, the price of the second-largest cryptocurrency by market capitalization has fallen from $1,275 to $1,135. However, similar to Bitcoin, there are some indications that a recovery is in progress.
On the four-hour chart for ETH, the TD Sequential additionally provided a buy signal in the form of a red nine candlestick. A consistent candlestick close above $1,160 could support the bullish nature of this formation. If this took place, Ethereum might rise toward its 200-hour moving average, which is currently at about $1,200.
Although the odds currently seem to be in favor of the bulls, it is crucial to keep an eye on the price of Bitcoin and Ethereum as trading volumes continue to decline. The top cryptocurrency could fall to $20,000 or $19,375 if the $20,450 support level for BTC is breached. While this is going on, ETH might fall to $1,050 if it loses $1,127 as support.
