Bitcoin, Ethereum Enter Price Discovery Mode
The two largest cryptocurrencies by market cap may test higher highs after setting new all-time highs.
Key Takeaways
- Bitcoin and Ethereum have entered price discovery mode.
- Further buying pressure could push BTC to nearly $75,000.
- Likewise, ETH might rise to $9,350 if buy orders continue to pile up.
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Bitcoin and Ethereum appear to have entered a new leg up after breaching previous all-time highs. Although market participants could be getting too optimistic, these cryptocurrencies may still have plenty of room to advance further.
Bitcoin Resumes Uptrend
Bitcoin made a new all-time high at $68,540 as it appears to have entered a new leg up.
The flagship cryptocurrency kicked off the week of Nov. 8 on a positive note. Since Monday’s open, BTC has surged by more than 8% to reach a new record high, gaining more than 5,210 points in market value.
From a technical perspective, Bitcoin appears to be contained within an ascending parallel channel on its daily chart since Jul. 20.
Every time BTC has risen to this technical formation’s upper boundary since then, the uptrend has reached exhaustion, leading the price to retrace to the pattern’s middle or lower edge. From this point, the pioneer cryptocurrency tends to rebound, which is consistent with the characteristics of a parallel channel.
Now that Bitcoin has rebounded from the channel’s middle trendline, it is not unreasonable to guess that it is heading towards its upper boundary. Such a bullish price action projects that BTC could gain another 9% in market value to hit $74,730 before the next correction takes place.
It is worth noting that some argue that cryptocurrency enthusiasts have entered a state of “extreme greed” as Bitcoin has gone into price discovery mode. Such market sentiment is not necessarily a good sign for the continuation of the uptrend.
It is imperative to pay close attention to the $64,900 support because any signs of weakness at this level could result in a correction towards $57,2000.
Ethereum Looks Unstoppable
Ethereum made a record high of $4,845 before Bitcoin entered price discovery mode, which suggests ETH is leading the most recent run-up.
The second-largest cryptocurrency by market cap has gained over 200 points since Monday’s open. Although the $5,000 psychological resistance level might serve as a price point for many traders to realize profits, ETH faces little to no discernable opposition ahead.
The formation of a cup and handle pattern on Ether’s daily chart projects further upside potential. The distance between the bottom of the cup and the pattern’s breakout level indicates that Ethereum has another 93% gains to meet the bullish target of $9,350.
Given the current market sentiment, it is imperative to consider the downside potential to avoid getting shaken out. The $4,000 level can be thought of as a strong foothold for Ethereum. Only a breach of this support barrier can lead to significant losses as the next interest area sits around $3,000.
Disclosure: At the time of writing, the author of this feature owned BTC and ETH.
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