Over the longer run, I do think that Ethereum will take off, but I think we have a long way to go before we are “all clear.”

• The Ethereum market rallied a bit again during the trading session, but as you can see, we continue to hear a lot of noise just above current pricing.
• There is a major resistance barrier between the $1800 level and the $2000 level.
• If we can break through all that, then it would be a very bullish sign, but I just don’t see how that happens without some type of massive momentum-building exercise going on.

Pay Attention to Risk Appetite

Signs of exhaustion coming into the picture could get things going to the downside, in a bid to pull back to the 50-day EMA. The 50 Day EMA is currently near the $1380 level, so it’s likely that could be a target for a serious breakdown. Pay close attention to the risk appetite of traders around the world, as it could give you an idea as to how Ethereum plays out. After all, crypto is pretty far out on the risk spectrum, so traders need to feel fairly comfortable putting money to work in these riskier assets.

If we were to break above the $2000 level, it could be a severe change of trend, perhaps opening up this move to a much bigger run. This could be due to the merge coming, as well as quite a bit in the way of upgrades throughout the year. There seems to be good news on that front, but we have not been able to break out seriously at this point, so you have to keep that in mind as well. I think more likely than not, we are in the process of trying to build up a bit of an accumulation phase. That being said, the market is very noisy, so you have to be cautious about that as well.

On the downside, if we break down below the $1200 level, that could send Ethereum much lower. At that point, it’s likely that we could go down to the $900 level. The $900 level getting broken through could open up a move down to the $400 level for Ethereum. Ultimately, I think this noisiness will continue, so you should be cautious about putting too much into the market at one time, especially as the market has to worry about so many external influences as well. Over the longer run, I do think that Ethereum will take off, but I think we have a long way to go before we are “all clear.”

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Ultimately, this market goes lower.

• Ethereum was very quiet on Wednesday as with very little in the way of momentum. 
• The market has been consolidating for a while
• We are going to simply trade back and forth between the $1250 level above, and the $900 level underneath.
• As the market continues to go back and forth, it looks as if we are either trying to build a bit of a base, or we are getting ready for the next leg lower.

The Next Leg Lower

At this point, I suspect that the next leg lower is probably going to be the most likely outcome. Because of this, the market is more apt to simply grind away until we get some type of fundamental reason to get moving. If we were to break down below the $900 level, then it opens up the possibility of a move down to the $500 level. The market could get down there rather quickly on some type of bad news, not the least of which would be a strengthening US dollar which seems to be all but a formality at this point.

If we were to break above the $1250 level, then it’s possible that we could go to the 50-day EMA which currently sits at the $1500 level. After that, the $1750 level is the next target, which we have broken down from. I highly doubt that we can get above there, and I think that as long as we have a strengthening US dollar and a tightening Federal Reserve, it’s difficult to imagine that some of these more risk appetite-sensitive assets will do well. In fact, Ethereum is going to get smoked as long as money is not willing to take a significant amount of risk as this is about as risky as it gets for most institutions.

Fading rallies continue to work from what I can see, especially as Ethereum 2.0 drags on, as we have no real catalyst for the market to go higher. However, the Federal Reserve will eventually change its tune, and when it starts to talk about loosening monetary policy, it’s at that point that crypto, and by extension Ethereum, could get a bit of a push to the upside. Ultimately, this market goes lower.

The outlook for the pair is bearish, with the next key support being at 15,000.

Bearish View

• Sell the BTC/USD pair and set a take-profit at 15,000.
• Add a stop-loss at 20,000.
• Timeline: 1-2 days.

Bullish View

• Set a buy-stop at 20,500 and a take-profit at 22,000.
• Add a stop-loss at 18,000.

The BTC/USD pair crash continued during the weekend as sentiment in the cryptocurrency industry waned. Bitcoin declined to a low of $17,700, which was the lowest level since 2020. This price was significantly lower than the all-time high of almost $70,000.

Bitcoin Sell-Off Accelerates

Bitcoin and other cryptocurrencies continued their sell-off as investors continued worrying about the new Fed policies and the soaring inflation. The market sentiment is equally negative across most asset classes.

The ongoing BTC crash coincides in a period when American stocks have been in a sharp decline. For example, the S&P 500 index officially moved to a bear market last week.

These assets declined as worries of a more hawkish Fed continued. In its interest rate decision last week, the Fed decided to hike interest rates by 0.75% for the first time in almost three decades. It also hinted that it will deliver another 0.75% or 0.50% in the coming month.

This hawkishness is happening at a time when investors are anticipating a recession as the American economy weakens. For example, data published last week revealed that the country’s building permits and housing starts declined sharply in May.

Meanwhile, the BTC/USD pair is falling as participants in the industry see red. Last week, it was reported that MicroStrategy was staring at a margin call as the value of Bitcoin holdings plummets. Last week, Celsius hired restructuring experts after a crisis in its operations emerged. There are fears that the crypto lender will soon go burst.

Three Arrows is another crypto company that has been in trouble. Once a $10 billion hedge fund, the company has seen the value of its holdings plummet in the past few months. There are worries that it won’t survive. Worse, other major players in the industry are going through similar issues.

BTC/USD Forecast

The BTC/USD continued its downward momentum as demand for the coin evaporated. This sell-off gained steam after the pair moved below the important support at 20,000. It also managed to move below 2017 high of 19,700.

Bitcoin remains below all moving averages, as shown in the daily chart below. At the same time, oscillators like the Relative Strength Index (RSI) and the Stochastic have moved below the oversold level.

Therefore, the outlook for the pair is bearish, with the next key support being at 15,000. A move above the key resistance at 20,000 will signal more upside.

The market will continue to see a lot of pressure, but I think that the occasional rally will scare a lot of short-sellers.

The French index had tried to rally a bit in the futures market earlier on Thursday but then sold off quite drastically as we have seen negativity in stock markets around the world. We are now significantly below the €6000 level, breaking down to the €5800 level by the end of the session. I think it’s only a matter of time before we break down below, but right now it’s probably only a matter of time before we get some type of relief rally. That relief rally is something that I would not trust because quite frankly there’s no reason to buy equities anywhere right now.

The narrative around stocks is far too negative to think that now is the time to pick up value, despite what talking heads will tell you. The reality is that there is a lot of fear out there, and it’s only going to get worse. The market will continue to see a lot of pressure, but I think that the occasional rally will scare a lot of short-sellers. However, breaking down below the €5700 level opens up the possibility of a move down to the €5500 level.

The ECB is not quite ready to announce its completely dovish intentions, but a few cracks in the ice have appeared. If that happens, it may help stocks, but eventually we will start to talk about whether or not the economy is growing or not. The French economy is suffering right along with the rest of other major ones, so it’s not a huge surprise to see the CAC fall right along with everything else. Ultimately, rallies at this point cannot be trusted for a bigger move until we get above the 6400 level. If we break above there, then we could turn around completely. However, this is a market that shows a lot of uncertainty, and therefore fear should continue to run where we go next. The selling off of the CAC is going to coincide with everything that we see around the world, including the DAX which leads the rest of the European Union. The one thing that I would say is to make sure that you keep your position size relatively reasonable, as the volatility will continue to cause headaches for those trading this market going forward. The Euro has strengthened over the last couple of days, but it’s probably only a matter of time before we see the euro fall as well.

If we are at the end of the bear market, you should have plenty of time to get in.

The S&P 500 has rallied significantly during the day on Thursday as buyers continue to look for reasons to get long. Recently, we have seen yields in America show signs of falling, as traders are starting to bet that the Federal Reserve will not raise interest rates as much as once feared. At this point, it will be interesting to see how this plays out from a longer term standpoint, but right now it looks like people are willing to come in and pick up stocks.

Whether or not that ends up being something that sticks is a completely different question, but it’s worth noting that volume has been decelerating on rallies, so one has to wonder whether or not there is a whole lot of momentum behind them? The 4100 level above will offer resistance, extending to at least the 4150 level. I will be looking at the Friday close as a bit of a signal because traders are not willing to take on the risk of holding through the weekend any long positions, which tells me that this is more noise than anything else.

On the other hand, if the market closes toward the top of the range like it has during the Thursday session, then it’s possible that people have enough conviction to make this thing go higher. Above the 4150 level, we would have to challenge the 50 Day EMA which is currently sitting at 4200. After that, the 4300 level has been significant resistance as well and is backed up by the 200 Day EMA. In other words, it’s not that we can’t go higher, it’s just that is going to take a Herculean effort. If we break down below the 4000 level during the day on Friday, it’s very likely that we would go lower, perhaps reaching down to the 3800 level, which is where the bottom of the hammer from last Friday sits. I don’t believe that was the end of the bear market, so at this point in time, I look at this as a rally within the bear market. Rallies within bear markets tend to be very brutal, so none of this changes my attitude right now, but the Friday close could give us quite a bit of information worth following. If we are at the end of the bear market, you should have plenty of time to get in.

Bearish View

• Sell the BTC/USD and set a take-profit at 25,470.
• Add a stop-loss at 30,000.
• Timeline: 1 day.

Bullish View

• Set a buy-stop at 29,525 and a take-profit at 32,000.
• Add a stop-loss at 27,000.

The BTC/USD crashed below the support at 30,000 as demand for cryptocurrencies waned. The coin dropped to a low of 27,830, which was the lowest level in eleven months. It has crashed by more than 60% from its all-time high.

Terra Contagion

The biggest story in the cryptocurrency industry has been the implosion of Terra and its ecosystem. LUNA, which was one of the top-ten cryptocurrencies, declined sharply after its main stablecoin lost its peg.

As a result, LUNA saw its price crash below $1, which was a dramatic collapse considering that it was trading at $120 in 2021. Additionally, the total value locked (TVL) in its ecosystem declined from over $30 billion to less than $4 billion.

Therefore, the BTC/USD pair has crashed as investors worried about contagion in the blockchain industry because of the important role that stablecoins play in the sector. Also, there are signs that there will be more regulations in the sector.

The pair also declined as the US dollar index held steady after the latest American consumer inflation data. According to the Bureau of Labor Statistics (BLS) showed that the consumer price index declined slightly in April. The decline was nonetheless better than what analysts were expecting. As such, investors believe that the Fed will stick to its plan of hiking interest rates.

Meanwhile, on-chain data shows that many Bitcoin holders have started liquidating their positions during the crash. At the same time, inflows have been limited, as evidenced by the performance of Coinbase. On Tuesday, the company revealed that it made a major loss of over $400 million as the number of active users crashed. Its revenue and forward guidance missed what analysts were expecting.

BTC/USD Forecast

The BTC/USD pair has been in a spectacular crash in the past few months. The pair managed to move below the important support at 30,000 as the LUNA implosion continued. It is now trading between the third and second support lines of the standard pivot points.

The pair has also formed a bearish flag pattern and moved slightly below the 25-day and 50-day moving averages. Oscillators have all moved lower. The pair will likely keep falling as sellers target the key support level at 25,470, which is the third support. The stop for this trade will be at 30,000.