According to popular analyst Ali Martinez, Bitcoin and Ethereum seem to have lost strength after the flash crash of Binance US on Thursday.
- Bitcoin and Ethereum are holding above key support levels.
- If they lose these key interests, both assets could face significant losses.
- According to the analyst, BTC could drop to $58,000 and ETH to $3,700.
Binance USA’s trading algorithm suffered from a bug that caused a Bitcoin flash crash on October 21st. Although prices are recovering rapidly, both cryptocurrencies are now trying to find support to avoid further losses.
Bitcoin has reached critical support! Here are the expected levels
Bitcoin and Ethereum are pulling back after a sudden crash. Binance US was hit by a bug on Thursday, causing a crash that saw the Bitcoin price drop by nearly 90%. Ethereum also fell 50% on the stock market. Although both assets showed a rapid recovery, the event had a significant impact on the market. The sudden increase in selling pressure plunged the leading cryptocurrency as low as $60,100 and eroded its market cap. It is not yet clear whether BTC will hold above support, although prices will rebound.
From a technical standpoint, Bitcoin’s price action appears to be contained within an ascending parallel channel that has developed since Oct. Since then, every time BTC has risen to the upper border of this technical formation, it has been rejected and pulled back to the lower edge of the formation. From this point on, it tends to rebound, which is consistent with the characteristics of a parallel channel. According to the analyst, now that Bitcoin has reached the lower trendline of the channel, a rise to the middle or upper trendline may begin. These key areas of resistance are $66,000 and $70,000, respectively.
Analyst: It is very important to pay attention to Bitcoin’s interaction with $ 62,000
While the recent price history suggests that a meaningful recovery is imminent, it is crucial to pay attention to Bitcoin’s interaction with $62,000. Any increase in selling pressure leading to the breakout of the support level could invalidate the optimistic view. In this case, BTC could drop to the 100 or 200 four-hour moving average. These demand zones are $59,000 and $52,000, respectively, according to the analyst.
As Bitcoin plummeted, Ethereum was largely rejected on October 21 as it approached its all-time high of $4,380 in mid-May. Data from Bybt shows that roughly $46 million worth of long ETH positions were liquidated due to the sudden pullback. Since the flash crash, ETH has also been unable to hold firmly above $4,000.
According to the analyst, Ethereum could test $3,400
Measured from the October 17 low of $3,640 to the October 21 high of $4,375, the Fibonacci retracement indicator shows Ethereum sitting on stable support. The combination of the 50% Fibonacci retracement level and the 50 four-hour moving average at $3,922 is the prime area of interest for ETH.
As long as prices do not close below this barrier, the price could rise again towards $4,574. However, a decisive four-hour candlestick below the $3,922 level could lead to a steeper correction. Ethereum could dive later and even test $3,400.
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