Market analysis from Cryptology Key suggests a cautious outlook for Bitcoin and Ethereum following recent price surges, with indicators pointing towards potential pullbacks. While Bitcoin recently surpassed the $126,000 mark, its upward momentum has shown signs of stalling, and Ethereum, after exceeding $4,700, has also experienced a decline. These movements prompt a closer examination of technical indicators to anticipate future price action.
Bitcoin’s Technical Landscape
On a monthly timeframe, Bitcoin’s structure remains within an upward trend. However, the breach of its all-time high (ATH) often precedes a corrective phase, a common pattern in asset price cycles. The monthly chart analysis suggests that the market is digesting this significant milestone.
The weekly chart provides further insight into potential retracement levels. A key area of interest is identified at approximately $115,345, representing a significant volume area that previously fueled an upward impulse. Additionally, analysts are observing the potential for liquidity to be captured within the $108,570 to $110,721 range.
Delving into the daily timeframe, the ATH breakout and subsequent absorption have created an Order Block (OB) zone of interest. A test of this zone, coupled with reactions on lower timeframes, could present opportunities for short positions. Targets for such positions would at least extend to the daily Fair Value Gap (FVG) observed between $118,226 and $114,800, alongside the previously mentioned weekly targets. Following liquidity capture, price delivery into short zones of interest is a common scenario. Beyond the daily OB, a four-hour FVG also presents a potential point of reaction for short trades. The convergence of these identified zones on both four-hour and one-hour charts underscores the importance of observing price reactions and chart patterns for strategic entry points.
Ethereum’s Price Dynamics
The monthly chart for Ethereum indicates a potential lag compared to Bitcoin. There remains a possibility for ETH to reach its ATH or exhibit a significant correlation divergence with Bitcoin, known as a “$SMT$” divergence in technical analysis.
The weekly timeframe offers a more compelling perspective. Ethereum’s price has already captured liquidity from a weekly swing high and has formed an OB zone, currently within this area. This zone could potentially generate the momentum needed to retest or surpass previous highs.
On the daily chart, after liquidity was extracted from a swing high, a reaction occurred, forming a daily short-biased OB. This area could influence subsequent price movements. A primary zone of interest for potential upside continuation lies within a daily long-biased FVG. The four-hour chart further refines this analysis, identifying a short-biased FVG that could trigger a reaction for short positions, contingent on the formation of a clear trading model. Similar to Bitcoin, the alignment of zones across the four-hour and one-hour timeframes emphasizes the need for traders to await clear price action signals and observe developing patterns.
Chainlink’s Technical Outlook
The weekly chart for Chainlink reveals liquidity accumulation below an OB zone, which is a key area of interest. A positive reaction from this zone could support a continuation of its upward trajectory.
A short-biased OB has also formed on the daily chart, suggesting a potential for price retracement from this level. Analysts are targeting the previous highs for potential short-selling opportunities, with a focus on capturing liquidity. Subsequent to this, a shift towards seeking long positions after profit-taking on shorts is anticipated.
On the four-hour timeframe, an additional zone has emerged where price reactions are being monitored. The immediate target involves reaching $19.80, after which profit-taking on short positions is expected, followed by an assessment for potential long entries.
Chris brings over six years of hands-on experience in cryptocurrency, bitcoin, business, and finance journalism. He’s known for clear, accurate reporting and insightful analysis that helps readers stay informed in fast-moving markets. When he’s off the clock, Chris enjoys researching emerging blockchain projects and mentoring new writers.