Bitcoin Faces Bearish Pressure After Powell’s Remarks, Ether Shows Signs of Market Indecision

Bitcoin’s Reaction to Powell’s Dovish Remarks

In the latest analysis by CoinDesk analyst and Chartered Market Technician Omkar Godbole, Bitcoin (BTC) has seen a notable pullback following Federal Reserve Chair Jerome Powell’s recent dovish comments. These remarks stirred expectations for a potential rate cut in September, which initially gave Bitcoin a boost. However, BTC has since retraced to levels last seen before the announcement, currently trading just above $112,000 after reaching a high of approximately $117,440 on Friday.

Technical Analysis: Bearish Signals Emerge

A closer look at the daily chart reveals that Bitcoin’s recent pullback has established a lower price high, which is in close proximity to a resistance line defined by the previous bullish trendline originating from April’s lows. This lower high reinforces the breakdown of the previous trendline, indicating a potential continuation of bearish price action.

Adding to the bearish sentiment, the Guppy Multiple Moving Average (GMMA) indicator is on the verge of confirming a bearish momentum shift. This is suggested by the imminent crossover of the short-term exponential moving averages (the white band) falling below the longer-term averages (the red band).

Weekly Chart Insights: MACD Signals Downward Momentum

On the weekly chart, the MACD histogram has commenced the trading week with a sub-zero reading. This indicates that downward momentum may be accelerating, further hinting that Bitcoin’s bullish rally could be faltering.

Market Conditions: Bearish Patterns Persist

The current market sentiment raises questions as to why Bitcoin has struggled to sustain a rally in light of favorable news, such as Powell’s speech. The persistence of bearish technical patterns is concerning for traders and investors alike.

Key Support and Resistance Levels

For those monitoring Bitcoin’s performance, key technical support lies at the $110,756 level, which corresponds to the lower boundary of the Ichimoku cloud. A more substantial support zone is indicated by the 200-day simple moving average near $100,000. Conversely, reclaiming Friday’s high of $117,440 is essential for any recovery in the bullish case.

Support Levels: $110,756, $100,887, $100,000
Resistance Levels: $117,440, $120,000, $122,056

Ether’s Market Performance: Doji Candle Indicates Indecision

Turning to Ethereum (ETH), the market has witnessed a doji candle formation with a prominent upper wick, signaling indecision among traders at record high levels. This candlestick pattern occurs when the opening and closing prices converge, indicating a stalemate between buyers and sellers.

Bearish Divergence: Caution Ahead

In this case, the long upper shadow suggests that bullish attempts to push prices higher encountered significant resistance from bearish forces, pulling prices back down before the close. While a doji does not guarantee a reversal, it does indicate uncertainty and a potential loss of upward momentum.

As the market stands, a pullback for Ethereum seems likely, especially as the 14-day relative strength index continues to print lower highs over the weekend, signaling a bearish divergence. This divergence indicates a loss of upward momentum, which could lead to a correction.

Current Ethereum Trading Status

At the time of writing, Ethereum is trading approximately 3% lower at $4,624. Key support levels for ETH are located at $4,065, the price level from which ETH surged higher on August 20.

Support Levels: $4,065, $4,000, $3,805 (50-day SMA)
Resistance Levels: $5,000, record highs

Conclusion: Navigating the Current Crypto Landscape

As both Bitcoin and Ethereum navigate these turbulent waters, traders and investors must remain vigilant. Understanding the technical indicators and market sentiment is crucial for making informed decisions in this rapidly changing environment. For those interested in venturing into Bitcoin or Ethereum, resources on buying Bitcoin and buying Ethereum can provide valuable insights.