Currently, the bulls are attempting a reversal, which is likely to carry the cryptocurrency to the neckline of the head and shoulders pattern at $13,202 levels.
We expect another round of selling from those levels, which is likely to sink the BTC/USD pair back to the support zone of $10,704.99 to $9,300. If this support zone breaks, a fall below $8,000 is likely.
On the other hand, if the bulls succeed in holding the support zone, it will lead to a start of a new uptrend. Nimble-footed traders can play the rise, but others should wait for more clarity to develop.
ETH/USD
We expected the support zone between the trendline and $940 to hold. On Jan. 17, Ethereum broke below the trendline and fell to a low of $770.
The bulls bought the dip aggressively, which has resulted in a pullback that carried the cryptocurrency towards the 50 percent Fibonacci retracement levels of the recent fall from $1424 to $770.
For the past three days, the ETH/USD pair has been struggling to cross above $1097. If the price breaks out of the $1100 levels, we expect a move to $1174.36 and $1284.28 levels. As the stop loss is $930, which doesn’t offer a good risk to reward ratio, we are not suggesting any trade on it.