Is this the beginning of a crypto resurgence?
Cryptocurrencies have been in the doldrums over the course of 2018, with bitcoin losing 84% over a 12-month period from the $19,764 peak on 17 December. While this huge capitulation has been incredibly remarkable, there is a common feeling that this is not necessarily the end for the cryptocurrency movement as a whole. For the most part, we have not seen much by way of bullish reversal signals, with the wider daily timeframe highlighting the continued creation of lower highs throughout this painful 14-month period.
However, this could come to an end, with the past two weeks providing a noteworthy 17% rise for this crypto poster boy. This brings us closer towards the key bullish breakout point at $4235, which - if broken - would bring about a bullish signal for the coming period.
As noted on 21 January, the slow decline seen throughout the beginning of this year stands in stark contrast to that rare upward surge seen in late December. The fact that we are seeing a similarly bullish period of surging price action of late provides us with signs that this upside phase is coming into play.
The daily chart below highlights the break through an interesting inside trendline resistance on Monday, with bitcoin looking to have created a new higher low. It is notable that the Monday rally managed to post a daily close above and outside the Bollinger Band. This is typical of a market that is set to continue breaking in that direction, rather than reverting back towards the central 20-day simple moving average (SMA).
The shorter-term uptrend we are seeing has been confirmed with the creation of a new higher high and low after the $3709 level was overcome. This points towards further upside around the corner. For greater confidence in this move, we want to see a break above that $4235 resistance level, bringing about expectations of a likely wider impending surge.
Ether is another of the crypto giants which has been grabbing the attention of traders over the past week, with the price trading some 89% lower than the January 2018 peak of $142.00. However, with the price of ether rising 40% in the past 12 days, there is reason to believe that we are seeing the beginning of a substantial period of upside for this cryptocurrency. Much like bitcoin, we still have a major hurdle to overcome, here in the form of the January peak of $159.00.
Ultimately, we have both bitcoin and ether showing signs of a potential bottom, with months of sideways price action finally gaining some bullish traction. With key levels above, the wider bullish signal is yet to come. However, should that breakout come, this could be an attractive time for traders to look at cryptocurrencies once more.
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