Bitcoin has seen its price rebound by nearly 17% in the past 24 hours.
Likewise, Ethereum reclaimed $2,000 as support after going as low as $1,700.
Nevertheless, BTC and ETH now both face stiff resistance ahead.
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Bitcoin and Ethereum kicked off Friday’s trading session in a positive posture. While the technicals show bullish signals, caution is advised until a clear resistance break.
Bitcoin and Ethereum Bounce
More than $30 billion has flowed into the cryptocurrency market over the past 24 hours, triggering a significant rebound across most digital assets.
Bitcoin bounced off the $26,660 level to reclaim $30,000 as support. The sudden upswing came as a surprise to many as investors remain fearful over the stability of the stablecoin market following Terra’s UST collapse. Still, the flagship cryptocurrency appears to be positioned for further gains.
The Tom DeMark (TD) Sequential indicator presents a buy signal on Bitcoin’s daily chart. The bullish formation developed as a red nine candlestick, which is indicative of a one to four daily candlesticks upswing. To confirm the optimistic outlook, BTC must slice through the $31,225 resistance level.
Breaching such a critical resistance area could encourage sidelined investors to reenter the market, pushing Bitcoin to the next interest zone at nearly $35,000.
Ethereum also looks primed for a bullish impulse after making a U-turn at the $1,700 support level. The second-largest cryptocurrency by market cap has gained nearly 450 points in the past 24 hours, with the TD Sequential anticipating more upside. This technical indicator flashed a buy signal on ETH’s daily chart after it hit oversold conditions.
It is worth noting that the $2,260 to $2,500 price range would likely serve as a stiff resistance level for Ethereum. Although the technicals anticipate further gains, ETH must clear this level to confirm the optimistic outlook. If successful, ETH could advance to $2,700 or even $3,000.
While the cryptocurrency market appears to be gaining steam for a relief rally, it is imperative to understand that Terra’s death spiral has generated a great deal of uncertainty, and its impact may not yet be fully understood. Market participants might be encouraged to take advantage of a potential rebound to exit some of their positions as fear spreads. A significant spike in selling pressure could put cryptos at risk of another downswing.
Under such unique circumstances, investors should watch out for a sweep of the recent lows that could send Bitcoin to $21,000 and Ethereum to $1,400.
Disclosure: At the time of writing, the author of this piece owned BTC and ETH.
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