Weekly Recap: Bitcoin and Ethereum Consolidate, Awaiting for Volatility to Strike Back

Bitcoin kicked off the week of November 30th with a bang. Its price opened Monday’s trading session at $18,180 and immediately began trending up. By December 1st, at 8:00 UTC, the flagship cryptocurrency had risen by more than 9.8% to hit a new all-time high of $19,956.

Some market participants seem to have taken advantage of the upward price action to realize profits. The spike in sell orders triggered a nearly 9.6% correction that saw Bitcoin slip momentarily underneath Monday’s open at $18,050. While this marked the lowest price point of the week, it was not significant enough to get sidelined investors to buy in masses.

As a result, the pioneer cryptocurrency entered a consolidation period seen throughout the rest of the week. Between Wednesday, December 2nd, and Friday, December 4th, BTC was mostly contained in a narrow trading range defined by the $18,625 support and the $19,560 resistance level.

Each time Bitcoin rose to the overhead resistance, a rejection followed, pushing it back to the underlying support. And from this price point, prices tended to rebound.

BTC was forced to close Friday’s trading session at $18,663 because of its sideways price action. Although the bellwether cryptocurrency looked great at the beginning of the week, investors could only grasp a weekly return of 2.7%.

Ethereum Went South as the Hype Around ETH 2.0 Faded

Like Bitcoin, Ethereum also entered the week of November 30th on the right foot. As speculation mounted around the most-anticipated ETH 2.0 upgrade, buying pressure began building up. The spike in demand saw Ether jump by nearly 11%.

The second-largest cryptocurrency by market capitalization went from a weekly open of $576 to a new yearly high of $639 within 32 hours.

Nonetheless, the Beacon Chain’s launch on December 1st was seen by market participants as a “sell the news” event. Those who had been anticipating such a milestone on the Ethereum network seem to have sold to realize profits, triggering a steep decline. ETH plummeted by more than 12.6% to reach the lowest price point of the week at $558.

The smart contracts token recovered some of the losses incurred on December 1st slowly throughout the next two days, but the upward pressure was weak, suggesting more pain on the horizon. Ethereum surged by nearly 12% to hit a high of $625, on December 3rd, at around 16:00 UTC, to then take a nosedive towards the end of the week.

By Friday, December 4th, Ether had retraced by more than 9% to close the week at a low of $567.7. Investors incurred a weekly loss of 1.5% regardless of the high levels of speculation around Ethereum 2.0.

A Steep Correction on the Horizon

While the sentiment around market participants remains overwhelmingly bullish, Bitcoin and Ethereum seem poised for a retracement. The Tom Demark (TD) Sequential index is currently presenting sell signals on these cryptocurrencies’ monthly charts, anticipating that a steep correction is underway.

If a spike in sell orders validates the bearish formations, BTC and ETH may retrace for one to four monthly candlesticks. On their way down, the pioneer cryptocurrency may find support around $13,500, while Ether – around $370 region.

It is worth noting that a bullish impulse that sends these cryptocurrencies above the recent highs may be strong enough to ignite FOMO among market participants. Only a daily candlestick close above $19,956 for BTC and $639 for ETH will invalidate the bearish outlook. Under such circumstances, Bitcoin could rise to $24,000 and Ethereum to $800 or higher.

Konstantin Anissimov, Executive Director at CEX.IO