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Bitcoin, Ethereum Drop Below $27K and $1.6K: Where are Biggest Cryptos Heading Next?

Published September 22, 2023 1:36 PM
Nikola Lazic
Published September 22, 2023 1:36 PM

Key Takeaways

  • Total market capitalization drops by 3%.
  • Bitcoin and Ethereum slide below their local supports.
  • Bearish sentiment remains but larger moves are on the horizon.

After a brief period of optimism, notably between September 11th and 19th, the cryptocurrency market has entered a downturn. Although the total market cap has only seen a modest decline of around 3%, the preceding increase of just 8% raises concerns.

Bitcoin and Ethereum are grappling with the challenge of sustaining their bullish momentum and have dipped below their local support levels, yet they remain above their September 11th lows.

Is this a precursor indicating that the earlier minor uptrend may not result in a sustainable one? If so, what is the potential downside for the two leading cryptocurrencies?

Bitcoin Price Analysis 

Bitcoin’s price has been on a downward trajectory since July 14th when it reached its peak at $31,815. This peak followed an upward trend that began on November 21st when the price hit its lowest point at $15,650, marking the conclusion of that upward movement.

Interaction with descending resistance
Bitcoin’s downtrend

The price initially began a gradual decline, which later accelerated sharply on August 14th, dropping from $29,535 to $25,500 on August 24th, representing a substantial 14% decrease in a single move.

This decline broke the previously established ascending trendline, which had acted as a support level, erasing all the gains accumulated since June 15th. This signaled a shift in control towards the sellers.

Following the decline, the market entered a period of sideways movement, with an unsuccessful attempt to establish an uptrend in late August. This ultimately resulted in another lower low on September 11th, briefly dipping below $25,000.

If this is indeed the commencement of a more extensive correction or a downtrend, the low reached on September 11th might mark the completion of the initial move. This implies that the recent minor increase could be the beginning of the second corrective move.

According to this analysis, we might anticipate a rise, possibly reaching a maximum of around $29,200, before the continuation of the downtrend towards $22,000, as this rise is expected to be corrective. However, in this scenario, it’s essential for the price to remain above its September 11th low, preferably above $26,000, which represents the horizontal level of the previous sideways range.

ETH Price Analysis

ETH reached its annual peak on April 16th, reaching $2,135, and made another attempt to break this record on July 14th, falling just short of surpassing the $2,000 mark. Unlike Bitcoin, the downtrend that began on April 16th is not as pronounced on the Ethereum chart. Instead, we’ve witnessed a choppy pattern resembling a corrective phase.

Breakout near
ETH close to its breakout

Furthermore, the downward movement since July 14th is relatively smaller in magnitude compared to the previous decline that took place from mid-April to June 14th when the price reached $1,630.

Notably, a descending resistance line originating from the July 14th high has proven to be robust, yet the price has consistently remained above $1,600 during each decline, forming a descending flat pattern.

Currently situated at the apex of this triangle formation, a breakout is imminent, though the direction remains uncertain. If the $1,600 support fails, it could result in a sharp decline towards the $1,300 area. However, if this level holds, we may witness an upside breakout, with an initial price target at $1,770.

Conclusion

As the cryptocurrency market faced uncertainty, particularly in the second half of August, it exhibited choppy price action. Although there was an attempt to initiate an uptrend from September 11th, the decline since September 19th has cast doubts on this potential reversal.

Currently, the pivotal factor as we approach a potential breakout is for the prices of BTC and ETH to remain above their September 11th lows, preferably establishing a higher low. Such a development could indicate the possibility of further upward movement.

Whether this rise will be limited as a corrective phase, with further downside potential ahead, remains to be seen. At this juncture, our primary focus is on determining the breakout direction before forming any new assumptions.

Disclaimer

Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.

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