Bitcoin and Ethereum Are at a Crucial Turning Point
The most recent data from the United States Department of Labor reported that employment levels were stable in August, which contributed to a little increase in both Bitcoin and Ethereum prices.
Although the pace of job creation in the United States slowed in August, it remained robust in spite of growing economic concerns and fears of a recession. The report from the Labor Department found that businesses had gained 315,000 positions during the course of the previous month. The unemployment rate in the United States rose to 3.7% in August, up from 3.5% in July; this result was somewhat over what was anticipated.
The information that was made public on Friday appears to have been positively received by investors. A price boost of approximately two percent has been recorded for Bitcoin, while Ethereum is currently in the lead with a gain of five percent as of press time. In spite of the recent increase, there are still a number of technical signs that indicate to a much more severe correction in the near future.
On August 26, Bitcoin price action appeared to have broken out of a bear flag pattern. This technical pattern speculates that an increase in the volume of sales could drive Bitcoin (BTC) into a decline of 44.6% toward $11,850. In spite of the dismal forecast, it appears as though the leading cryptocurrency is getting ready to stage a modest recovery before it hits a lower bottom.
Bitcoin may have the strength to ascend toward the 50-day moving average of $22,000 if a significant daily candlestick closes above the 10-day moving average at $20,340.
Additionally, it appears that a negative technical formation is emerging on the daily chart of Ethereum. ETH might be making a head-and-shoulders pattern, with the right shoulder being the right shoulder. A failure to break above the 50-day moving average at $1,650 might significantly enhance the likelihood of a more severe price drop in the not too distant future.
In the event that this scenario plays out, and Ethereum’s price falls below the support level of $1,430, a 30% decline to $1,000 becomes a highly likely scenario. In order to disprove the bearish thesis, ETH needs to break above its 50-day moving average before it can continue its upward trajectory. It is possible that doing so will cause a surge toward its 200-day moving average, which is currently around $2,100.
Given Bitcoin and Ethereum’s ambiguity
it is imperative to wait for a decisive close above support or below resistance before trying to time their next major price movements.