As we all know, Bitcoin has gone through a difficult period in the months after it hit a new all-time high. After reaching an all-time high of nearly 65,000 U.S. dollars, this largest cryptocurrency has been hovering between 30,000-40,000 U.S. dollars for several weeks; while the second largest cryptocurrency, Ethereum, reached nearly 4,400 U.S. dollars in mid-May. The current trading price is about US$2100.
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Investors are looking for signs of Bitcoin’s future trends. Rich Ross, technical strategist at Evercore ISI, stated in a recent report that Bitcoin’s price movement revealed “a dangerous chart full of voice and anger without any support.” He believes that the first resistance level of Bitcoin price is at 36,000 US dollars, the support levels are at 33,000 US dollars and 30,000 US dollars, and it may fall to 22,000 US dollars or below. In addition, he added that Ethereum is “relatively more promising, especially if it stands above $2,400.”
Below are some charts that investors can follow when trying to find the next development direction of Bitcoin and Ethereum.
Compared with U.S. stocks
Bitcoin’s year-to-date gains were several times that of the S&P 500 index. But as cryptocurrencies fell and U.S. stocks continued to hit all-time highs, the situation changed. For several weeks, they have moved almost the same.
Bitcoin’s performance was significantly better than the U.S. stock market
Will the volatility increase?
The Bollinger Bands circle the price of Bitcoin, essentially warning that volatility is about to pick up. The bandwidth defined by the percentage difference between the upper and lower bands is approaching a year-to-date low, and the 14-day average true volatility is approaching the lowest level this year.
Bollinger bands suggest that the market may be more volatile
Correlation with gold
The rolling 60-day correlation between Bitcoin and spot gold has turned negative, which has only happened a few times since 2018. This can actually be regarded as a good thing, because the lower correlation makes the asset more suitable for diversified asset allocation. Nonetheless, this suggests that the “digital gold” nickname given to Bitcoin by some people may no longer be appropriate.
The correlation between Bitcoin and gold has become negative, which is a rare event recently
Ethereum
In recent trading days, Ethereum has been floating slightly above its 200-day moving average because the line seems to be providing support, which is good news. The bad news is that the 50-day moving average looks likely to become a resistance level, which is near the $2300 level, which does not provide much room for upside.
Ethereum holds steady above the 200-day moving average
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