BTC, ETH Approach Key Resistance Levels

By Sam Blumenfeld

Both the crypto and traditional equity markets have gained ground over the past two weeks as investors shake off uncertainty caused by interest rate hike expectations and the war in Ukraine.

There's a lot to cover, particularly in the recent price action of our leading cryptos. So, to give proper attention there, we're dedicating our entire Weiss Crypto Daily update to that breakdown. I'll be back with your regularly scheduled index roundup next week.

Bitcoin (BTC, Tech/Adoption Grade "A-") has risen consistently over the past two weeks, logging eight green candles in the last twelve days. And today, it pushed higher another 2%, reaching the critical $45,000 level.

There's a potential breakout looming.

Bitcoin has been unable to close above $44,600 in the last couple of months despite challenging the level several times, creating a triple-top pattern you can see in this Coinbase Global (COIN) chart:

If it can close here with confidence, breakout could send the price barreling much higher. Not without pullbacks, of course. But recent pullbacks have been short-lived and BTC has consistently set a trend of higher lows since the beginning of February.

All this indicates that if it finally stages a breakout, BTC could well be off to the races.

Bitcoin is trading well-above its 21-day moving average of $40,500. If we did see a pullback, I would like to see it bounce off support level at $42,000 or $40,000. While the crypto market is moving higher, it wouldn't be unusual to see a short-term drop considering its recent strength, and a test of support should boost confidence further.

Ethereum (ETH, Tech/Adoption Grade "A") has performed even better than Bitcoin recently, decisively breaking its trend of lower highs and recording eleven green candles in the last twelve days. It's up over 38% from its Feb. 24 low!

Ethereum is expected to face stiff resistance at $3,200, but a breakout could send it shooting much higher towards $4,000.

That would be excellent news for other altcoins, considering that they tend to follow Ethereum more closely than Bitcoin. If Bitcoin even just holds steady, alts will likely follow ETH higher.

And there are several potentially bullish catalysts in store for ETH, given its expected shift to proof-of-stake (PoS) consensus this year. The transition would allow Ethereum to scale more efficiently and cut its energy usage by 99%.

And since its EIP-1559 upgrade last summer, Ethereum has burned over 2 million ETH — roughly $6 billion in terms of U.S. dollars. ETH is set to officially become deflationary this summer, which will be bullish for prices, as well.

Ethereum is trading significantly higher than its 21-day moving average of $2,750 after its recent run, and $3,000 remains an important support level in case of a pullback.

Here's Ethereum's price in U.S. dollars via Coinbase:

Notable News, Notes and Tweets

What's Next

The total market capitalization of the crypto market retook the $2 trillion milestone again yesterday, which is encouraging for investors. With optimism building, crypto's movements over the next couple of weeks will be crucial for gauging its overall health.

Bitcoin and Ethereum are facing critical resistance levels which, if overtaken, could lead to significant breakouts for the broader market. However, the crypto market is approaching a crossroads where it could revert back to neutral, range-bound trading if it faces another pullback.

If the market can gather the momentum needed to break through overhead resistances, Bitcoin and Ethereum could jump back to $53,000 and $4,000, respectively. It's still way too early to call for a return to a bull-market cycle, but a big breakout would go a long way.

Crypto faced one of its longest consistent sell-offs up until the beginning of February, and it's likely to remain in neutral over the short to medium term. Despite the volatile day-to-day price fluctuations, the crypto market's long-term prospects become brighter and brighter as adoption progresses.

Best,

Sam