Despite a Mild Recovery, Bitcoin (BTC) and Ethereum (ETH) Could Still Be Set for Further Losses

After shocking losses over the weekend that wiped out all of last weeks gains, Bitcoin began to show some recovery this week, climbing back up to $12,000 briefly.
Last week, the cryptocurrency charts went parabolic, with Bitcoin and other cryptos making 20 – 30 percent gains in a matter of days. Bitcoin topped out just below $14,000 and then began a quick and nasty correction all the way back down, briefly dropping to $9,800. Fortunately, the $10k support line held and provided strong enough support for Bitcoin to begin its steady recovery. Now, once again testing $12k, investors are wondering where it will head next.

Ethereum must fight to break $300

Ethereum enjoyed a similar strong week, breaking through the much anticipated $300 mark and continuing upwards to $350 before facing the same fate as BTC. Although it has recovered slightly this week it remains below the significant $300 mark, meaning any further upward movement is going to have to fight hard to break through it.
The ETH/BTC trading pair remains inside its descending triangle pattern, with ETH recently closing slightly below the lower support line at 0.0246, which has held since December 2017. Losing this support line could mean ETH is about to break out of the descending triangle to the downside, confirming a bearish trend reversal.

The Facebook connection

Bitcoin is in a slightly better position, with strong support at $10,000 and a market potentially buoyed up by the mass of retail investors who just discovered crypto due to Facebook’s Libra coin announcement. While the Facebook project itself doesn’t even represent a real cryptocurrency, it has no doubt introduced thousands of newbies to the emerging world of digital currencies. Ironically, U.S. Congress members recently penned a letter to Facebook requesting that they cease production of Libra – something they could never do to Bitcoin, as pointed out by Anthony Pompliano on Twitter.
Indicators are not showing positive signs though, with some historical patterns painting a pretty dire picture. The 2014 bull run and resulting correction can be identified by three very clear spikes, which are difficult to ascertain simply by looking at a graph but are highlighted by certain indicators like RSI and the Wooklich ratio. With the same pattern playing out now since the 2017 bull run, if the graphs are right, Bitcoin may still drop lower before bottoming out.
Then again, Facebook wasn’t launching a cryptocurrency back in 2014…

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