While overall market conditions remain strained and in their prolonged downtrend, we’re beginning to witness a bit of life across the board after numerous names, particularly Altcoins, appear to have technically ‘washed-out’ on 8/14 and have since put in a nice bounce into higher ground.
In addition, while the Altcoins were plumbing lower depths earlier this week (Tuesday), Bitcoin (BTC) did not break below the 6K level and perhaps more importantly, did not approach more meaningful support located at the 5750-5780 zone.
Furthermore, while things took a nasty turn over the past two (2) weeks, we can’t help but notice that Short Interest in Bitcoin remains elevated and at extremely high levels despite present short-term oversold conditions. Thus, present conditions coupled with elevated open Short Interest may just be the spark that ignites the fuse for a potential short squeeze in BTC that may overflow throughout the entire tape/landscape.
With Bitcoin presently trading in the 6500 area, we suspect that BTC has the potential for further upside and may find itself working its way back into the 6900 level (and perhaps a tad higher 7200-7300), which just so happens to coincide with its 20 and 50 day moving averages, as well as present potential short-term resistance and not to mention, the former neckline level from its inverted head-and-shoulders pattern developed throughout the June-July period, which was ultimately ‘taken-out’ and sparked the counter-trend rally that we had been anticipating as well as directing our readers attention to such a potential scenario.
Thus, while we suspect BTC has further room to run before encountering potential resistance at the 6900 figure, we also want to direct readers attention to what may be in the cards for the Ethereum price (ETH) moving forward via the Chart below:
As we can observe from the daily chart above, ETH remains in its downtrend trading below all of its important moving averages (20/50/200 SMA), which continues to suggest an unfavorable technical posture.
However, we can also witness that on Tuesday 8/14, ETH put in a nasty bar, touching down just beneath the 250 level (249.93) on meaningful volume, which from our perch, may have signaled short-term capitulation and as a result, has since started to find its legs underneath itself and has begun the process of moving in a northern trajectory.
Thus, while the technical picture from a longer-term outlook remains suspect as well as unfavorable, the short-term prognosis is starting to display some healing with regards to both price and direction.
Moving forward, both investors/traders may want to utilize the following levels for further clues/evidence with respect to direction and to perhaps take advantage of what may be setting up as a nice short-term thrust in ETH.
If at any time in the days ahead, ETH can go ‘top-side’ of the 333 level, we suspect that such development, should it materialize, may just set the stage for an advance into the 365-380 zone (and perhaps higher), representing a quick 20-30% move with the 275-280 area providing short-term support.
Nonetheless, for those investors/traders seeking a quick scalp/move in ETH, we believe that present conditions are ripe for the picking with room for additional upside.
As always, risk management is a priority. Therefore, be sure to adhere to your Stops and not overstay your welcome as longer-term conditions remain tenuous.
iBC
Happy Trading~
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.
Image courtesy of Pexels
Charts courtesy of tradingview.com
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