Bitcoin bulls still seem to be in holiday mode, but ethereum buyers have been off to a running start this year. Are these trends likely to continue?
Bitcoin is fighting to keep its head above the neckline of a head and shoulders pattern seen on a longer-term chart, forming a new ascending channel instead.
Price is sitting right at the bottom of this channel near the $14,000 major psychological support and might be due for a bounce while stochastic nears the oversold region. In that case, bitcoin could make it back up to the resistance past $17,000 or at least the mid-channel area of interest at $16,000.
The 100 SMA is still above the longer-term 200 SMA on this time frame, so the path of least resistance could be to the upside, suggesting that the uptrend could carry on. However, a break below the channel support could show that selling pressure is picking up.
Ethereum surged past the top of an earlier ascending channel formation, marking the start of a steeper climb.
And climb it did! Price even gapped up over the weekend to hit fresh record highs and continues to enjoy strong bullish momentum as the gap between the moving averages keeps widening.However, stochastic has formed lower highs while price had higher highs, creating a tiny bearish divergence. A pullback may be due, and the rising trend line connecting the lows since the third week of December might be a potential correction zone.
Note that ethereum is still faced with a barrage of technical issues, including inflated transaction costs and blockchain syncing. Then again, as the second largest cryptocurrency in market cap next to bitcoin, ethereum could be drawing more market interest as the latter slows.
A bit of fair warning, though. There is a considerable amount of risk in trading cryptocurrencies due to their inherent volatility and sensitivity to headlines. Be careful out there!