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 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 is not intended to and does not change or expand on this. 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 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 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 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 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 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/en-hk/legal/disclaimer/saxo-disclaimer)

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo or its affiliates.

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK Limited (“Saxo”) is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo holds a Type 1 Regulated Activity (Dealing in Securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged Foreign Exchange Trading); Type 4 Regulated Activity (Advising on Securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products may result in your losses exceeding your initial deposits. Saxo does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo does not take into account an individual’s needs, objectives or financial situation. Please click here to view the relevant risk disclosure statements.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-hk/about-us/awards.

The information or the products and services referred to on this site may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and services offered on this website are not directed at, or intended for distribution to or use by, any person or entity residing in the United States and Japan. Please click here to view our full disclaimer.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc. Android is a trademark of Google Inc.