Bitcoin fails to break $12,000 providing minuscule weekly returns.
The pioneer cryptocurrency kicked off the week on the right foot as its price jumped 3.54% upon Monday, August 10th, open. Bitcoin went from trading at a low of $11,685.99 to reach a weekly high of $12,100 by 2:00 UTC. The upswing appears to have turned market participants euphoric about a potential bullish continuation towards $14,000.
Nonetheless, large investors seem to have taken advantage of the rising prices to realize profits. The spike in selling pressure behind the flagship cryptocurrency was significant enough to push prices back down by nearly 6%. By 10:00 UTC on August 10th, BTC was hovering around $11,384.90.
This price hurdle acted as stiff support allowing Bitcoin to rebound sharply. A few hours later, the bellwether cryptocurrency was back around the $12,000 mark. Yet again, this significant supply barrier rejected BTC’s uprising, triggering a 7.15% correction that extended throughout Tuesday, August 11th.
As a result, Bitcoin dropped to reach a weekly low of $11,127 a few hours before Tuesday’s close. An important number of buy orders were filled around this support level, which helped BTC rebound. But nine hours later, this cryptocurrency was back around this price point, forming a double bottom.
The reversal formation was validated by a considerable increase in the buying pressure behind Bitcoin. As more investors rushed to get a piece of the price action, BTC entered an uptrend that saw it recover some of the losses incurred throughout the rest of the week.
Although the bullish impulse was quite volatile, the flagship cryptocurrency was able to close Friday, August 14th, at $11,767.89. It provided investors with a weekly return of 0.70%.
Ethereum Breaks Out Aiming for $600
Unlike Bitcoin, Ethereum entered the week consolidating within a symmetrical triangle that had been developing since the beginning of the month. On Monday, August 10th, the smart contracts giant was hovering around the upper trendline of this technical formation, suggesting that it was poised to retrace towards the lower boundary. The bearish impulse towards this support level did not materialize until Tuesday, August 11th, at 2:00 UTC.
From that point onwards, the second-largest cryptocurrency by market capitalization saw its price drop by almost 8% to reach a weekly low of $366.05 on August 12th, at 6:00 UTC. This price hurdle was strong enough to allow Ether to bounce back to the overhead resistance. A similar market behavior repeated throughout the next day, but by 19:00 UTC, Ether was breaking out of the consolidation pattern mentioned above.
Moving past the overhead resistance seems to have ignited FOMO (fear of missing out) among market participants. As buy orders began to pile up, Ethereum surged over 13.50%, smashing through the $400 resistance barrier. By Friday, August 14th, at 16:00 UTC, ETH had reached a weekly high of $445.66.
Since then, the smart contracts giant seems to have entered a consolidation period before its next significant price movement. Ethereum was able to close the week at $438.71, providing investors with a whooping weekly return of 12.34%.
The Odds Seem to Favor the Bulls
Given Ethereum’s price action throughout the week, it seems like this cryptocurrency could be leading Bitcoin. If this is the case, it is reasonable to assume that the pioneer cryptocurrency is also preparing to break out. Moving past the $12,000 resistance barrier could see it rise towards late June 2019’s high of $14,000 or even higher.
Ether, on the other hand, appears to aim for the next significant area of interest that sits between $600 and $800. Although these bullish targets seem to be far ahead, the price behavior seen throughout the entire market suggests that a new bull market has begun.
Now more than ever, it is imperative to implement a robust risk management strategy to avoid getting liquidated by the normal fluctuations of the market. The idea behind this strategy is to have cash ready to deploy in the event of a correction since it could lead to a further upward advance.
Executive Director at CEX.IO. His area of responsibility includes customer relationships with institutional and VIP-clients, overseeing the creation of the company’s development strategy, new products, markets and partnerships. As a member of the board of directors, Konstantin is also responsible for corporate governance.