Bitcoin enters corrective period generating weekly losses of 3.80%
|Bitcoin kicked off the week of January 11th on the left foot. Indeed, its price plummeted by more than 20%, generating over $1.70 billion in liquidations across the board. According to the exchange rate of CEX.IO, BTC's market value went from a daily open of $38,264 to hit $30,333 within 16 hours, marking the lowest price point of the weekly trading session.
Despite the significant losses incurred, investors did not wait long to re-enter the market. On-chain data reveals that the number of addresses holding more than 1,000 BTC surged by nearly 1% as Bitcoin tumbled. Roughly 20 whales joined the network over this short period, helping prices recover promptly.
From a technical perspective, the pioneer cryptocurrency was able to bounce off the 100-four-hour moving average. The rebound came after the Tom Demark (TD) Sequential indicator presented a buy signal on the 4-hour chart. Given the significant increase in buying pressure, the bullish formation was validated, leading to a new TD upward countdown.
By Thursday, January 14th, around 12:00 UTC, Bitcoin had fully regained lost ground following a 32% upswing. The flagship cryptocurrency peaked at a high of $37,398 before market participants started to book profits in preparation for the weekly close. As sell orders began to pile up, BTC retraced by more than 8.50%.
Bitcoin closed on Friday, January 15th, at a low of $36,900. Despite the impressive price recovery that BTC experienced throughout the week of January 11th, holders incurred a weekly loss of 3.80%.
Ethereum Fails to Break New All-Time Highs, Dropping by More Than 7%
Like Bitcoin, Ethereum also suffered a steep correction as the new weekly trading session started. Its price plunged by more than 27%, going from Monday's open, January 11th, of $1,258 to a low of $900, according to CEX.IO's exchange rate.
The downswing generated fear, uncertainty, and doubt around market participants reflected the rising number of negative Ethereum-related posts on social media. The general belief was that Ether was never going to see triple digits again. As a result of the downward price action, more than $630 million worth of ETH positions were liquidated across the board.
Despite the pessimism surrounding the smart contracts giant, sidelined investors took advantage of the opportunity to buy this token at a discount. The massive increase in buy orders helped Ethereum regain the $1,000 level as support. From a technical perspective, the rebound seems to have come from the 100-four-hour moving average on the 4-hour chart.
As buying pressure mounted, Ether entered a new uptrend that allowed it to recover from Monday's losses. By Friday, January 15th, around 00:00, Ethereum had risen by nearly 38% to hit a high of $1,255. But as the weekly trading session came to an end, traders took profits, causing prices to retreat by 7.30%.
As a result, Ethereum closed the weekly trading session at $1,171. ETH investors saw their holdings depreciate in market value by 7.10%.
Ambiguous Outlook Ahead of BTC and ETH
Bitcoin and Ethereum have been correlated for a while. Wherever the bellwether cryptocurrency moves, the smart contracts token will likely follow. However, these cryptocurrencies are now presenting different scenarios for their near-term price action.
For instance, the TD Sequential indicator presented a sell signal on BTC's 3-day chart. The bearish formation developed as a green nine candlestick forecasting a one to four 3-day candlesticks correction. If validated, Bitcoin could be poised to retrace towards the $30,000 support level again or even drop to $27,000.
Only a 3-day candlestick close above the recent all-time high of $42,000 will invalidate the pessimistic scenario. If this were to happen, Bitcoin could rise towards $50,000.
Conversely, Ethereum seems to be developing an ascending triangle on its 4-hour chart that will likely lead to a breakout over the week of January 18th. By measuring the distance between the triangle's highest points and adding it to the x-axis, this technical pattern forecasts an upside target of 30%. A spike in buying pressure that helps confirm this formation will see ETH rise towards a new all-time high of $1,700.
It is worth noting that if the second-largest cryptocurrency by market capitalization drops below the $1,160 support level, the bullish outlook will be jeopardized, leading to a steep correction.
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