It was expected that there would be a bull rally in the crypto market in November and December, similar to 2013 and 2017. In the first week of November, when the total value of the crypto market reached $ 3 trillion, we got excited. The days chased the days, but the expected bull rally did not start. On the contrary, from November 10 to yesterday, there was a pullback in prices of about 30%. Finally, we have witnessed a rise in prices since yesterday.
I would like to evaluate how the crypto market can develop through Bitcoin and Ethereum graphs.
Bitcoin Price Analysis
The chart above shows the logarithmic price development of Bitcoin since 2012. I added the orange trend line. The exponential regression model that forms the trend line has a value of 0.84 R square. We can express this R square value that the trend line explains the price movement of Bitcoin by %84. We see that the pullback in the last 40 days has brought Bitcoin to the ‘normal’ price level. That means that the Bitcoin price is currently at a level consistent with its historical averages.
I would like to take a closer look at the Bitcoin price via the daily chart.
Even if Bitcoin is not in an uptrend yet, we see that the MACD indicator has returned to positive, and convergence has formed on the RSI chart. Looking at the chart a little further away, we see a typical uptrend.
The first peak reached in September ended with a 50% Fibonacci retracement. From the peak reached in November, there was a Fibonacci retracement of 78.6%. If prices had retreated a little more, we would have ruled that the upward trend ended. Of course, such a scenario is still possible with an instant price pullback.
Ethereum Price Analysis
Similar to Bitcoin, I want to start by looking at the big picture first.
In the weekly chart above, we see the price change of Ethereum since 2015. The trend line derived from the exponential regression model I have plotted on the graph has a value of 0.83 R square. We see that the actual price is slightly higher than the ‘normal’ value of Ethereum which is at the level of 3400.
When we look at the Ethereum price through the daily chart, we see that convergence has occurred on the RSI indicator similar to Bitcoin and that the MACD is turning positive.
It is also possible to observe an uptrend on the Ethereum chart. The first Fibonacci retracement in Ethereum was in the range of 50%-61.8%, and the second Fibonacci retracement was at the level of 61.8%. The last uptrend line seen on the chart is my guess. The next few days will be quite critical.
Conclusion
Technical analysis of two cryptocurrencies, which make up 59% of the market, shows that the outlook on the market is returning to positive again. If the upward trend continues, the first goal will be the reach of all-time high values in Bitcoin and Ethereum. After these levels have been exceeded, we can see the long-awaited bull rally finally starting. In such a scenario, it would not be a surprise for Hive to climb back to the $3 level.
Thank you for reading.
P.S. I am not a financial advisor and the opinions I shared above do not contain investment advice.
Image Source: https://pixabay.com/photos/death-valley-desert-highway-road-3133502/