Bitcoin’s Bulls Lost Control of the Price ActionWhen looking at Bitcoin’s daily chart, it seems like its price action throughout Wednesday, July 29th, was contained within an ascending parallel channel. BTC made a series of higher highs and higher lows until a few hours before the day ended. But the overall trend was mostly bullish.
The flagship cryptocurrency opened at $10,939.06, but quickly dropped by 0.87% to hit an intraday low of $10,844.34. This price hurdle served as stiff support, which encouraged the bulls to step back into the market. Consequently, Bitcoin started to trend upwards.
Consistent with the characteristics of an ascending parallel channel, each time BTC rose to the upper boundary of this technical pattern, this resistance barrier was able to reject it, triggering a pullback towards the lower border. From this point, the pioneer cryptocurrency bounced back to the top, and the whole sequence repeated.
By 21:30 UTC, Bitcoin had surged to hit an intraday high of $11,364.80, representing a 4.80% increase from the daily low previously mentioned. Although many believed that this cryptocurrency was bound to rise towards $12,000, this price hurdle was able to hold and prevented it from advancing further.
Consequently, BTC retraced and broke below the lower boundary of the ascending parallel channel. Moving past this significant support barrier appears to have caused panic among market participants, which resulted in a 2.28% correction that pushed prices below the $11,000 mark. However, Bitcoin was able to rebound a few minutes before the end of the day to close at $11,078.57, providing investors a daily return of 1.28%.
Ethereum Provided Miniscule Returns
Like Bitcoin, Ethereum also enjoyed bullish momentum throughout Wednesday, July 29th. Even though it opened the day on a negative posture as its price dropped from $317.19 to $313, the buying pressure increased, allowing it to recover the losses incurred. Indeed, Ether surged by 4.17% to hit an intraday high of $325.99 by 8:30 UTC.
This price point quickly rejected the upward price action, which caused ETH to retrace by 1.77%. From that point on, the second-largest cryptocurrency by market cap consolidated within a narrow trading range. This consolidation period was defined by the $321.21 support and the $323.60 resistance level.
Only an hour before the daily close, the $321.21 support level failed to continue holding. As a result, Ethereum took a 1.79% nosedive to trade at $315.73, but a significant number of buy orders were triggered around this level. The smart contracts giant bounced back and closed the day at $318.12 to provide ETH holders a daily return of 0.29%.
Technical Indexes Flash Sell Signals
The Tom DeMark (TD) sequential indicator continues suggesting that Bitcoin and Ethereum are bound to retrace. On BTC’s 12-hour chart, for instance, the TD recently presented a sell signal in the form of a green nine candlestick. Meanwhile, a bearish formation was provided in the form of an aggressive 13 candlestick on ETH’s 12-hour chart.
Following the bullish impulse that the top two cryptocurrencies by market cap experienced over the past week, the bearish formations presented by the TD index must be taken seriously. An eventual pullback could help maintain the uptrend of these cryptocurrencies healthy and provide an opportunity for sidelined investors to get back into the market. A new capital influx could propel Bitcoin and Ethereum towards new yearly highs.
Konstantin Anissimov, Executive Director at CEX.IO