Bitcoin and Ethereum could be gearing up to rally after incurring significant losses over the past few weeks.
Bitcoin jumped by 20% after printing a low of $17,600 this weekend.
Meanwhile, Ethereum surged by over 29% from a low of $880.
Both assets have reached crucial areas of resistance after the recent rebound.
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Ethereum took the lead in the latest cryptocurrency market revival, outperforming Bitcoin. Still, both assets appear to have more room to ascend.
Bitcoin and Ethereum Rise
The two largest cryptocurrencies by market capitalization, Bitcoin and Ethereum, look primed to recover from the recent market downturn as technical indicators turn bullish.
The cryptocurrency market kicked off the week with renewed confidence as it gained over $100 billion in value in 24 hours. The sudden upswing came after Bitcoin, Ethereum, and several other assets printed new yearly lows on Jun. 18, with Bitcoin dropping below $20,000 for the first time since December 2020. As the market tumbled, the erratic price action generated more than $900 million worth of liquidations across all major crypto-derivative exchanges.
Ethereum is the best-performing asset of the top five cryptocurrencies by market capitalization on the recent rally. It traded at a low of $880 and surged by more than 29%, hitting a local high of $1,140. Meanwhile, Bitcoin has jumped by nearly 20% since its Jun. 18 slide.
Despite the significant rebound Bitcoin and Ethereum have registered over the past few hours, both assets could be poised to rise higher.
The Tom DeMark (TD) Sequential indicator has presented buy signals on Bitcoin’s daily chart and Ethereum’s four-day chart. The bullish formations developed as red nine candlesticks, anticipating bullish impulses ahead. This type of technical pattern is indicative of a one to four candlesticks upswing.
Transaction history shows that Bitcoin faces stiff resistance at $21,500, where nearly 300,000 addresses have previously purchased over 210,000 coins. If the leading cryptocurrency can slice through this supply wall, it could gain the strength to advance to the next hurdle at $23,730.
It is worth noting that Bitcoin needs to hold above the $19,100 support level to validate the optimistic outlook. Failing to do so could trigger another sell-off toward $16,000 or even $14,000.
Meanwhile, Ethereum must overcome the $1,200 resistance level to validate the buy signal presented by the TD Sequential. An upswing past resistance could trigger a spike in buying pressure, potentially sending Ethereum to $1,800. Ethereum needs to hold above $1,000 to avoid printing lower lows, as a prolonged decline could lead to a crash to $700.
While the technicals show early signs of a local bottom, the macroeconomic outlook does not favor the bulls. The Federal Reserve’s commitment to hiking interest rates has become a major point of concern for crypto investors and global financial market participants alike as higher interest rates tend to hurt risk-on assets. Moreover, many economists have warned of a prolonged recession on the horizon, leading to mass layoffs across some of crypto’s top exchanges.
The crypto market has been hit hard amid the gloomy macro outlook, with the global cryptocurrency market cap at around $946 billion, around 68% down from its November 2021 peak. For Bitcoin and Ethereum to continue the uptrend, they will need to fight off the fears and hold above support. If they succeed, they may have a chance at enticing investors back to the market.
Disclosure: At the time of writing, the author of this piece owned BTC and ETH.
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