The Nasdaq Composite Index plunged more than 4% on Tuesday after new inflation data revealed that the rate of inflation was not lowering as expected by Wall Street. This led to a massive sell-off, causing major losses in stocks such as AAPL and AMZN. The crypto market’s titans were also targeted by the selling forces after Bitcoin fell 10% on Tuesday. Traders are encouraged to exercise caution in light of the recent severe volatility.
As seen in the chart above, Bitcoin has falsely broken out twice and has trapped traders from both ends of the zone, which is why traders must be very cautious and wait for a clear retest before taking any positions.
A positive false breakout occurred around the $19000 support level, assisting the bulls in pushing the price to $22500. However, the bears were quick to return; a bearish fake breakout occurred quickly after Bitcoin broke over the barrier level. This is indicating market uncertainty at the present, therefore traders should avoid taking any trades until either is broken.
If the support at $19000 is broken, expect a sharp fall to the next support at $18500.
Ethereum back to $1300?
In our previous analysis, we had expected Ethereum to hit the $2000 mark which was hit just a week later! However, since then Ethereum has been falling continuously and is showing no signs of slowing down.
Ethereum has underperformed in recent days, falling by more than 13% in only three days. The slide of Ethereum does not appear to be done, and the Merge does not appear to be helping to preserve the price at the present.
After reaching a swing high of over $2000, Ethereum has been steadily declining and creating lower lows. If the last remaining support around $1420 is broken, anticipate a sharp drop to the demand zone of $1280. There are some signs of a reversal with the RSI falling to the oversold level, however, it is too early to say if this will just be a temporary relief rally.
Traders should avoid opening long positions in Ethereum unless it can retake the $1660 barrier level.