It’s been a rough stretch for cryptocurrencies like ethereum and bitcoin.
These are the two largest cryptocurrencies by market cap and they have not had an easy run as of late.
Bitcoin is working on its fifth straight daily loss, while ethereum is working on its fifth weekly loss in six weeks.
While US stocks were able to hit new all-time highs over the last week — with the exception of the Nasdaq — bitcoin and ethereum have been under intense selling pressure.
Like tech stocks, bitcoin and ethereum did not take kindly to the Fed’s hawkish stance on Wednesday.
As such, they are on watch for potentially lower prices. Let’s look at the charts.
Bitcoin is teetering on this week’s low and depending on one’s data source, it is teetering on the flash crash low from last month.
Some providers have that level just below $42,000. Others — like the one above — have it closer to $40,000.
It hardly matters though. The point is the same either way: bulls need to defend the $40,000 level or risk lower prices.
A close below $40,000 could put the 21-month moving average in play down near $35,000. That’s followed by the summer lows down near $30,000.
Remembering back to the sentiment around that time, I know it will be ugly if we revisit those lows. That said, if equities remain pressured due a tightening monetary policy from the Fed, it may be hard for cryptocurrencies to garner much upside momentum.
If bitcoin is able to, let’s see if it can regain $45,500. If it can, the 200-day moving average is back in play.
Ethereum has a similar setup in that it’s retesting the December flash crash low, but different in the sense that it’s holding the 200-day moving average.
If ethereum can regain Wednesday’s low, we could be looking at a rebound back up to the $3,650 area and declining 10-day moving average.
Keep in mind though, ether’s overall trend has been lower as seen through its series of lower highs since November.
If it breaks below this week’s low, we could see $3,000 and the weekly VWAP measure.