What's next for Bitcoin? Will it break through the support of $ 18,500?
The publication of the US CPI Inflation Report and the subsequent Fed decision to raise the federal funds rate by 75 basis points for the third time in a row contributed to Bitcoin's decline by more than $ 4,600 from almost $ 22,800 to below $ 18,200, the lowest level from June this year and one of the lowest since November 2020.
For almost two weeks, the BTC has remained in a horizontal trend between the support of $ 18,500 and the resistance in the region of $ 20,650.
Comparing the dynamics of the current rebound with the dynamics of the previous downward movement, one gets the impression that the current tendency is only a kind of rebound, after which the BTC price will return to the downward path.
The further depreciation of BTC is also supported by the fact that consolidations such as those observed for several days are usually corrective formations, which means that the market statistically breaks out more often from this type of system in the direction consistent with the earlier move, which in this particular case may determine further declines.
It may also be supported by the fact that the upper limit of the current consolidation coincides with the measurement of 50% Fibonacci retracement from an earlier downward move.
As for the macroeconomic aspects, it is certainly not without significance that the Federal Reserve has recently made an upward revision of the interest rate path.
Although the Fed recently expected the federal funds rate to rise to a maximum of 3.8%, it is currently estimated that the peak will be 4.6%.
In November and December, the Fed will make two more hikes, and at least the first of them (possibly both) may also amount to 75bp.
Ethereum fell by almost 32% between September 11 and 21, 2022, beating technical support of $ 1,425. This sell-off only stopped in the following support area of USD 1,245, where on September 22 this year, there was a slight demand reaction.
Since then, this cryptocurrency has been moving horizontally between support in the $ 1,245 region and resistance of $ 1,425. Given that this is a form of a temporary rebound after previous declines and that the upper bound of this system coincides with the measurement of the 38.2% Fibonacci correction from an earlier downward move, it seems highly probable that after the end of this correction, ETH will return on a downward path and will slide to the region of $ 1,000, or even further to $ 800.
Bitcoin Cash (BCH)
Bitcoin Cash has been running since mid-August this year in the horizontal trend between the support of $ 112 and the resistance in the region of $ 133. It is noteworthy that there was a second, smaller one within this consolidation, which we have been observing since mid-September this year.
Both consolidations have two things in common:
I) the lower bounds of $ 112
II) the fact that they are corrective patterns after previous declines.
It also makes it statistically more likely that after the end of this trend, the BCH exchange rate will break down from it, slipping below $ 112, which in turn could naturally drive a further depreciation towards $ 97.
Litecoin fell by more than 25% from over $ 67 between September 13 and September 19, to $ 51, with a slight demand response in the second half of September.
However, the subsequent increases did not last too long, as a result of which the LTC rate stuck in a horizontal trend between support at $ 51 and resistance in the region of $ 55.50.
Suppose it is confirmed that this consolidation is only a form of correction after previous declines, and the market breaks down from it. In that case, we could expect further depreciation towards USD 47 or even USD 42.
Solana's quotations fell between August 13 and 29 this year by almost 38%, from over $ 48 to the region of $ 30. Since then, they have remained in a horizontal trend between the support of $ 30 and the resistance in the region of $ 37.50. It is also worth noting that the upper bound of this system coincides with the measurement of the 38.2% Fibonacci correction from the earlier downward move.
So if the SOL rate breaks down from the current system, we could expect its further depreciation towards the June lows, i.e. USD 26.
After a decline of almost 27% between September 13 and 21 this year, the Polygon cryptocurrency has an upward rebound. However, the range of this increase was limited only to the re-test of the previously defeated support (now resistance) and the slightly higher measurement of the 38.2% Fibonacci correction from the earlier downward move.
All this resulted in forming a right-angled triangle formation, from which a possible breakthrough to the bottom could drive a further depreciation towards USD 0.61, USD 0.45, or even USD 0.32.
The quotations of the Avalanche cryptocurrency fell between September 12 and 18 this year by almost 26%. Since then, the cryptocurrency has remained in a horizontal trend between support of $ 16.50 and resistance of $ 18.00.
Considering that a current formation is a form of correction after earlier declines, statistically, there is a greater probability that the market will finally try to break out of it with the bottom, which, if successful, could drive a further depreciation towards USD 14.50.
Looking at the XRP quotes, we can see that the price of this cryptocurrency increased by almost 74% between September 16 and 23, thus returning above $ 0.50. This increase stopped only in the area of the technical resistance level determined based on the lows of June and July 2021.
It is where the supply response appeared a few days ago. Therefore, if the declines have been taking place since then, the quotations of this cryptocurrency could even slide to the area of previously defeated resistance (now support) in the amount of USD 0.39.
Looking at the EOS quotes, we can see that after rebounding from the technical resistance of USD 1.90, the price of this cryptocurrency has slipped by over 39% over the past days, breaking the upward trend line and horizontal support of USD 1.35 and 1 . $ 25.
This sell-off only stopped in the next support area of $ 1.15, which we wrote about two weeks ago. Since then, the market has been moving in a horizontal trend, remaining slightly above this support.
However, if this level is broken, we could expect further depreciation towards USD 1.04 or USD 0.88.
In line with last week's projection, Chainlink's stock rebounded last Wednesday from technical resistance of $ 8.10. If the declines have occurred since then, we could expect to re-test the upward trend line around USD 6.60 in the near future.