Technical analysis of Bitcoin and Ethereum

A disastrous decline in prices at the September turnaround cancels out the gains accumulated over the past 10 days, bringing the balance of major cryptocurrencies back into negative territory since the beginning of the month.

The US inflation figure released on Tuesday, 13 September is among the main factors that are causing prices to fall.

The revealed consumer price index figure of 8.3% exceeded expectations that estimated a cooling to 8.1%.

Days later, the disappointment is having a direct reflection on all financial markets causing a general sell-off, from stock markets to oil to gold.

The week is set to end in losses not only for the major cryptocurrencies but also for the US stock indexes, from the S&P500 to the Dow Jones and through the tech Nasdaq, returning to mid-July levels.

It does worse for gold, which slips below $1,656 an ounce for the first time since April 2020, losing 20% from the all-time highs of $2,070/oz at the beginning of last March.

Dragging down traders’ pessimism is the falling hopes about weakening inflation forcing the Fed to become even more aggressive.

Surveys measuring the expectations of financial professionals currently estimate a 1 in 3 chance that at the next meeting the FOMC may decide to raise rates by another monstrous percentage point. At the same time, the probability of a half-percentage-point increase has plummeted to zero.

Bitcoin (BTC) price – technical analysis

The price slide below the technical and psychological threshold of $20,000 cancels out Bitcoin‘s accumulated rise during the past week.

Having failed to latch on to the 23,000 mark also contributed to sinking traders’ confidence with the 20-point Fear&Greed index back in the lower fear range at mid-July levels.

The collapse in prices in recent days aligns with the closing of the first weekly cycle of the new monthly cycle that began with the 7 September low. 

The possible close of the weekly cycle stops at about $19,500 and coincides with 75% of the Fibonacci retracement calculated between the September lows and highs.

Unfavorable signal for a monthly cycle set to the upside and currently similar to the previous quarterly cycle that characterized the June-September period.

The current conditions change the technical structure advising to lighten the medium-term bullish positions by continuing to navigate on sight and wait for a possible recovery of $21,000 in the coming days.

Ethereum (ETH) price – technical analysis

The descent of the ETH price back below $1,480 for the first time since 29 August, the day the current monthly cycle began, confirms the technical structure assumed in previous updates.

The technical structure advises waiting for the first days of next week to see whether the support of $1,400 will continue to repel bear attacks again.

In fact, in the past two months, the $1,400 threshold has proven to be a floor defended with teeth by the bull causing prices to rebound twice, in late July and late August.

Any sinking below $1,400 supported by the opening of new short sales opens up room to revisit $1,200 by late September.