December 19 Market Analysis: BTC & ETH


The market analysis written here is data driven educational content and not financial advice. 

With yet again, another mostly sideways and down week, Bitcoin has not been able to reverse it’s daily downtrend. At press time, Bitcoin fear and greed index is operating at a 29, while ticking up a bit from the prior day, still deep in the “fearful zone”.

Bitcoin (BTC/USD)

To reach the end of year $100k prediction, Bitcoin will need a “Christmas miracle”.

Bitcoin maintains a daily downtrend operating on lower highs each time the bulls have tried to push price up.

The bulls have failed to push the price of BTC back above the 200 EMA since it was broken on December 9th

This is putting further downward pressure on price action. This could take some time to play out as the last time Bitcoin was closing a daily candle below the 200 day EMA, it spent around 70 days trading mostly sideways below it. The 200 day is currently clocking in around $50k.

Bitcoin has a big week ahead and can reverse the daily downtrend if it breaks above $49,534 with a daily close. This move would likely initiate a move back above the 200 day EMA and the next target would be in the $54,000 and beyond.

On the other side, if Bitcoin continues to show any weakness at current price levels, the bears could push the price lower to $43k to test the big wick-low from Dec. 4th. It would not be surprising to see BTC test this wick-low area again to wash out a few more traders before a possible reversal.

On the weekly price chart, Bitcoin is still operating on higher lows and still maintaining a healthy up trend as long as it is closing weekly candles above $43,419. This level is also right in line with the 55 week-EMA at press time. It is also important to note that this is the last weekly higher low set back in September of this year when Bitcoin reversed off of the summer lows. Any move below that weekly higher low, from September and a closure, would break current macro market sentiment and likely send BTC to search for much deeper lows — maybe even retest the summer low near the $30K region.

Ethereum (ETH/USD)

ETH began this week trading at $4,136, dipped as low as $3,600 and is currently trading at $3,907 at press time.

On December 16, the 21 day EMA crossed the 55 to the downside for the first time since June of this year. Note: The last time this happened, Ethereum saw a 32% move down and it took a total of 42 days to put in a bottom and reverse.

Image from Gyazo

ETH is still working on a lower high structure and needs to close a daily candle above $4,134 to get out of the current downtrend. This price also comes in at the 21 and 55 EMA cross. A rejection at this level would give the bears strength to push the price lower. The next target down would be $3,750 and then the next area of interest would be the 200 day EMA at $3,447.

If ETH can get back above the 55 day moving average at $4,134 and close, the next target would be a resistance level at $4,438.  Ethereum has already been rejected by that level multiple times in the past month. The bulls would regain strength back above $4,438 and would likely put ETH on track to test all time highs again.

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