Technical Update - Crypto bubble imploding. Long way to solid ground Technical Update - Crypto bubble imploding. Long way to solid ground Technical Update - Crypto bubble imploding. Long way to solid ground

Technical Update - Crypto bubble imploding. Long way to solid ground

Cryptocurrencies 3 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

The Crypto currency bubble is collapsing. Bitcoin leads the way lower and has a long way to find solid ground. Ethereum outperforming Bitcoin but looks heavy too.
BTCUSD could drop below 10K and ETHUSD is looking at 500.


BTCUSD is in a confirmed down after breaking below 17,567 and seems to be set for a test of strong support at around 12,320 close to the 1.618 projection level at 12,841 of the July-August correction – blue set of Fibonacci’s.
However. BTCUSD could drop further to the low back in August 2020 prior to BTCUSD almost went vertical at around 9,813. That level is close to the 200% or 2.00 projection of the 2022 July-August correction at 9,920.
RSI has broken its rising trendline strongly indicating lower levels for bitcoin.
BTCUSD needs to close above 25,215 to demolish this bearish picture.

  

Source: Tradingview and Coinbase

ETHUSD has formed a Shoulder-Head-Shoulder like formation, not the most textbook perfect one but an S-H-S pattern nevertheless.
If ETHUSD is to travel the same distance after Neckline break out as from the Head peak to the Neckline it will go into negative.
But with this more irregular Shoulder-Head-Shoulder pattern the potential target is likely to be more modest.
A more plausible downwards target would be that ETH it travels 61.8% of the Head peak to the Neckline distance i.e., to around 615 as illustrated by the two vertical orange arrows.
ETHUSD almost reached that level during the April to June sell-off before a correction set in.

However, it could still reach that 615 - and quite possibly lower. 
ETHUSD is in a confirmed down trend on daily and weekly chart bouncing from the 0.786 retracement of the July-August correction. Support at 879.80 and if that level is taken out there is no support until the upper level of the consolidation area from 2020 between 489 and 290.

489 is also close to the 1.382 projection of the exhaustive peak in November 2021 – blue set of Fibonacci – and the 1.382 projection of the July-August correction – green set of Fibonacci’s.
However, ETHUSD could collapse to the lower level of the consolidation area around 290 possibly overshooting to 1.618 projection of the July-August correction at 167.90.
For ETHUSD to reverse this picture scenario a close above 2032 is needed.

Source: Tradingview and Coinbase

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)
Full disclaimer (https://www.home.saxo/legal/saxoselect-disclaimer/disclaimer)

Saxo Bank (Schweiz) AG
Beethovenstrasse 33
CH-8002
Zurich
Switzerland

Contact Saxo

Select region

Switzerland
Switzerland

All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law.

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.