Konstantin Anissimov, Executive Director at CEX.IO
BTC/USD opened at 36,799, according to the exchange rate at CEX.IO, and was trading in a downward fashion from 02:00 to 06:00 UTC. The pair bounced to 37,280 between 06:00 and 08:00 UTC and was mainly trending sideways until 16:00 UTC. Between 16:00 and 17:00 UTC, BTC/USD attempted an upswing from 37,351 to 38,000 but was stopped midways and driven close to the open of the hourly candlestick at its close.
As a result, a shooting star formed on the hourly timeframe and created downward momentum for BTC/USD the next few hours. A medium fall took place between 17:00 and 20:00 UTC, taking the trading pair down to the 50-period simple moving averages both on the hourly and 4-hour timeframes.
The whole picture on the 4-hour timeframe shows a narrowing of the symmetrical triangle. According to the classic wave trading theory, a new motive trend way – bullish in this case – should follow, but considering the huge and amazingly fast price growth that ended just on 10th January, a more sizeable correction than what we have as of 19th January would be a very logical continuation.
Presently, the BTC/USD price is very close to the lower boundary, which may act as support for some more time. But I would recommend waiting for the price exit from this triangle in order to have a more clear understanding of what is to follow in the near term.
ETH/USD opened the trading session of 19th January at 1,258.6, according to the exchange rate at CEX.IO, and took a sharp surge to 1,325 and the 4.236 Fibonacci retracement level at 1,324.7 between 01:00 and 02:00 UTC. The pair then spent five hours until 07:00 UTC above and below the level and attempted the second big surge of the day to 1,425.
The second upswing happened in two phases. First, the hourly candlestick took ETH/USD from 1,325 to 1,375.2 between 07:00 and 08:00 UTC. Then the trading pair rose from 1,380 to 1,430 between 11:00 and 12:00 UTC. The whole progress was almost completely nullified during the nest hour, which started an ascending triangle going at a rather sharp angle until 18:00 UTC, with a local resistance lying at around 1,420.
The exit from the triangle happened at the start of the 18th hourly candlestick. The price went sharply down, leading to a growing selling momentum. In one hour, the pair eventually slipped to 1,368.1. In the hour between 19:00 and 20:00 UTC, the pair made and up-and-down swing, finishing slightly below the open with considerable upper and lower wicks. A slight bounce between 20:00 and 21:00 UTC took the pair to 1,386.3.
Such massive bullish price action of ETH/USD against a backdrop of overall flat price action in BTC/USD may be a sign of Ethereum’s growing independence in market terms. The coming technological evolution of Ethereum called Serenity may be the key factor that is attracting more long-term interest to Ether as a financial asset.
Another explanation of this sudden growth could be a delayed demand for Ethereum as it was growing very modestly amid Bitcoin wild growth in November – December 2020. What we are seeing now, may be an attempt to close this gap.
As for the near-term market expectations for ETH/USD, it will be reasonable to expect some selling stimulus around 1,420 and buying stimulus at 1,325. In the current situation, trading ETH/USD should be done with caution as there is yet no clear understanding of how fundamental the reasons behind Ethereum’s sudden growth are. And it is still highly advisable for Ethereum traders to still keep an eye on BTC/USD as it is going to continue to affect the ETH/USD cross rate.
Executive Director at CEX.IO