- Bitcoin has fallen more than 20% in the past two weeks.
- Similarly, Ethereum has regained 19.5% since April 3.
- Both origins have reached critical support areas.
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Bitcoin and Ethereum started the week in a negative mode. Although prices have rebounded over the past few hours, it appears that both cryptocurrencies are hanging by a thread.
Bitcoin in Vital Support
Bitcoin is on top of one of the most vital support areas in its trend, as the whales seem to increase their holdings.
The leading cryptocurrency has seen its price drop by more than 20% over the past three weeks. It lost nearly 10,000 points in market capitalization, rising from $48,200 on March 28 to a low of $38,465 recorded earlier this morning. The losses appear to be contained by a critical demand area that likely determines Bitcoin’s fate.
The 200-day moving average at $39,500 on the three-day chart and the 78.6% Fib retracement level at $38,500 should continue to hold to avoid a brutal crash. Failure to do so could encourage investors to sell, putting enough pressure on Bitcoin to trigger a correction to $28,850 or even $28,830.
Despite bearish expectations of a breakout of the $38,500 support level, it appears that the whales were benefiting from the recent correction to collect more Bitcoin at a discount.
On-chain data from Glassnode shows that the number of addresses on the network with a balance greater than 1,000 BTC has increased significantly since April 8. Approximately 16 new whales have joined the network during this short period.
Although the increased buying pressure may seem insignificant at first glance, it is worth noting that each of these new addresses earned at least $39,000,000 worth of bitcoin.
More buying pressure around the current price levels could help bitcoin bounce off the $38,500 support level. Under these unique circumstances, it may rise to retest the 50-day moving average at $43,670 on the three-day chart.
Only a three-day candle closing above this resistance level can invalidate the pessimistic outlook and lead to a resumption of the previous uptrend.
Ethereum threatens to decline
Ethereum also appears to be hanging by a thread as retail interest fades while prices drop below $3,000.
The second largest cryptocurrency by market capitalization has seen a sharp 19.5% correction over the past two weeks, recently reaching a low of $2,883. The higher selling pressure may be attributed to the new delay in the protocol transition to Proof of Stake. Since the “merger” does not have a specific date yet, it appears that interest in Ethereum is declining.
The number of new daily addresses created on the Ethereum network continued the downward trend. This market behavior indicates that marginal investors are not interested in amassing more tokens at the current price level.
Network growth is often considered one of the most accurate price predictions for cryptocurrencies. In general, a constant decrease in the number of new addresses created on a particular blockchain leads to a sharp price correction over time.
Due to the lack of interest, Ethereum bulls should do everything in their power to avoid printing a daily candlestick close below $2,950. A breach of this support level could lead to a pullback to $2,570 or $2,160.
It is worth noting that there is still some hope as Ethereum has developed a golden cross between its 50 and 100 day moving averages. However, the bulls will now have to step in and push prices above $3,500 in order for Ethereum to resume its previous upward trend.
Disclosure: At the time of writing, the author of this article is owned by ETH and BTC.
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