Bitcoin (BTC) and Ethereum (ETH) Aim for ATH as Rally Continues
Key Talking Points:
- Cryptos attract investors looking for higher returns
- BTC/USD and ETH/USD resume uptrend after healthy pullback
Cryptocurrencies have seen another positive start to the week, boosted by risk-on sentiment in markets. There are also a few catching headlines out there that would seemingly be positive for the digital coins, ranging from the announcement that Mastercard will offer clients on their payment network the integration of crypto into their products, to the speculation that China may be looking into reversing its ban on Bitcoin mining after most miners fled to the US. There is also the news that Elon Musk has confirmed his crypto holding as being solely Bitcoin, Ether, and Dogecoin, boosting their valuation.
But cryptos have been outperforming for the last month as they were taking advantage of displaced funds from weakening equities. This divergence in the face of stagflation concerns has allowed cryptos to attract investors looking for higher returns given stocks remain at all-time highs with uncertain short-term outlooks. Bitcoin is up over 50% since the beginning of the new quarter, breaking to a new all-time high at $66,987. I would expect there to be some sort of “FOMO” drive behind the recent moves, but the push higher does seem to be more sustainable than in previous breakouts, so I expect the momentum to build further.
That said, it’s not unusual that we’ve seen some consolidation over the last few sessions as traders gather their thoughts on where to go next. The recent pullback from here is a healthy way to gather momentum as the push higher will need to build support along the way, and buying the dip is probably the best way to go around this. The $60,000 mark seems like a good area of short-term support and as long as BTC/USD is able to keep above $57,000 over the next few days, I expect the coin to continue pushing towards the $70,000 mark over the coming week or two.
BTC/USD Daily Chart
Following in Bitcoin’s footsteps, Ether has also seen a strong rally over the last month but the altcoin has failed to reach a new all-time high, coming in just $9 shy last Thursday. The pullback since then has been slightly less deep than with BTC so ETH/USD is now attempting to close the gap once again. The last few sessions have seen higher lows which is a good sign that buyers remain in control whilst staying above the ascending trendline support, now resting just above the $4,000 mark. Longer-term support remains between 3,379 and 3,500, where the 50-day SMA is converging, whilst short-term resistance may continue to cap momentum above $4,350.
— Written by Daniela Sabin Hathorn, Market Analyst
Follow Daniela on Twitter @HathornSabin