Last week the cryptocurrency market started on a positive basis supported by positive news. For example, on September 23, Twitter announced it would incorporate bitcoin tips by using a bitcoin address or a Lightning Network enabled wallet:
The crypto community hailed the news, claiming that Twitter will facilitate the mass adoption of cryptocurrencies and that Bitcoin will become the native currency of the internet:
Another positive news was that in the first month alone that Bitcoin was accepted as legal tender in El Salvador, the adoption rate in the country reached 1.6 million citizens, surpassing the number of bank accounts:
In the second half of the week, however, the market sentiment changed. Reuters announced that China’s top regulators would ban crypto trading and mining:
China’s news saw the price of Bitcoin drop from € 38,500 to € 34,500 in a matter of hours as the FUD spread across the cryptocurrency space almost immediately.
However, over the weekend the market began to rebound as the crypto community realized that the China FUD is nothing new on the market:
Hashcash inventor Adam Back even emphasized that messages like “China bans Bitcoin” are a clear buy signal:
After a fairly volatile week, the Monday market starts a solid intraday price rally. According to Coin360.com, a Bitcoin costs € 37,319.08 (+ 5.18%), an Ethereum – € 2,640.58 (+ 11.03%), a DOGE – € 0.1703 (+ 5.93%) and a UNI – € 20.79 (+ 37.28%):
Now let’s analyze the price charts of the leading cryptocurrencies against the Euro over the most notable time periods.
BTC / EUR
In the weekly timeframe (1W), BTC / EUR formed two consecutive ones Bearish engulfings:
According to the theory of technical analysis, a Bearish engulfing is a trend reversal pattern that occurs at the end of some uptrend. Therefore, the bulls should be very careful as the price of Bitcoin could continue to fall.
Still, the potential uptrend renewal remains on the 4-hour (4H) chart – BTC / EUR continues to hover within the Bullish flag (common trend continuation pattern):
According to the chart, the price is currently approaching the support line created by previous local highs. If the price bounces off this line, we believe that BTC / EUR could leave the flag up and the uptrend could resume. In this case, some more aggressive traders will open long positions.
ETH / EUR
In the daily chart (1D), ETH / EUR tests the lower line (Trend line) of Ascending channel (upward trend):
In our view, the uptrend can start again if the price bounces off the trendline. In this case a buy signal appears. However, if the price falls below the trendline, the downward pressure may intensify and the uptrend will break. In this case we stay out of the market.
In addition, we will also try to identify the buy signal on the 4-hour chart (4H). At the moment ETH / EUR is founding a Bullish flag (typical trend continuation pattern):
If the price leaves the flag up, an additional buy signal appears in the 4-hour time frame. In this case, opening the long position is less risky, as the buy signal is matched in the 4-hour period and in the weekly period.
DOGE / EUR
On the weekly chart (1D), DOGE / EUR is drawing a series of mainly bearish candlesticks with falling local heights and descending local lows:
This sequence of bearish candles is a clear signal that the bears are in control of the market. We would like to see at least one solid bullish candlestick on the weekly chart (1W) to consider opening a long position.
On the 4-hour chart (4H), too, the DOGE / EUR continues to slide within the Descending channel (downtrend):
As long as the price of Dogecoin is in the Descending channel, we prefer not to go long and stay in a “wait and see” mode.
UNI / EUR
In the weekly chart (1W), UNI / EUR a. educated Dragonfly doji this past week:
Technical analysis theory states that a Dragonfly doji after a price drop signals a possible price increase. It is therefore very likely that a rally in DOGE / EUR is imminent.
Interestingly, the 4-hour chart also supports a possible rebound. At the moment the price is consolidating on Detail of the double bottom (common trend reversal pattern):
In theory, the course can get enough neckline support to recover. However, we will only open a small long position if UNI / EUR leaves the Descending channel (downtrend) in the 1-hour chart:
As long as the price stays within the channel, we will stay out of the market.
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The analysis is purely informative and does not constitute investment, financial, trading or other advice, and you should not treat Bitvalex content as such. Bitvalex does not recommend that you buy, sell, or hold cryptocurrencies. You are solely responsible for performing your own due diligence and consulting an advisor before making any investment decisions.