On October 21, Binance US’s trading algorithm failed, causing Bitcoin to flash crash, Bitcoin Magazine reported. Although the price recovered quickly afterwards, both top coins are trying to maintain the support level to avoid further losses.
Bitcoin encounters critical support
Bitcoin and ETH still have to return to ATH after the flash crash. Binance US crashed on Thursday, causing BTC price to plummet about 90%. ETH is also down 50% on this exchange.
Although both recovered quickly, the event had a significant impact on the market. The evidence is that within hours of hitting a new ATH at $ 67,000, Bitcoin was down 7.4%.
The rise in selling pressure also helped push the top cryptocurrency into the $ 59,000 region, down nearly $ 8,000. On the flip side, after bouncing back above $ 63,000 yesterday, BTC is only trading around $ 61,000. Therefore, it remains to be seen whether the price can hold out above the support.
From a technical point of view, Bitcoin’s price movement appears to be within an ascending parallel channel that has been forming since October 4th. Whenever BTC recovered at the upper bound of the pattern, it was rejected and returned to the lower bound. From this point on, the price tends to rise again, which corresponds to the properties of the parallel channel.
Now Bitcoin has reached the lower trendline of the channel and can rise to the middle or upper trendline. These key resistance areas are at $ 66,000 and $ 70,000, respectively.
The source: TradingView
While recent price history suggests a significant rebound is imminent, attention should be paid to Bitcoin’s interaction with the 50 moving average (MA) on the 4-hour chart at $ 62,000. Any surge in selling pressure that breaks the support could weaken the bullish outlook.
When this happens, BTC is expected to drop to 100 or 200 MA on the 4-hour chart. These demand zones cost $ 59,000 and $ 52,000, respectively.
ETH does not reach a new high
While Bitcoin slumped, ETH received a violent rejection on October 21 as the price neared its all-time high of $ 4,380 in mid-May.
Exchange data from Bybt shows that around USD 46 million in ETH long positions were liquidated due to the sudden price decline. The ETH price has not stayed above USD 4,000 since the flash crash.
The fib retracement indicator is measured from the October 17th swing low at $ 3,640 to the October 21st swing high at $ 4,375, showing that ETH is above a stable support level. The 50% fib retracement level in combination with the 50 MA on the 4-hour chart at $ 3,922 is the most interesting area below the current ETH price.
As long as price avoids closing below this barrier, the uptrend is likely to continue to a new all-time high at $ 4,574.
The source: TradingView
However, a crucial 4-hour candle ending below USD 3,922 could result in a steeper correction. ETH will then look for support around the 100 MA on the 4 hour chart at $ 3,700 or even test the 200 MA on the 4 hour chart at $ 3,400.
You can see the coin prices here.
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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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