The crypto markets have extended yesterday’s losses into today, with most major cryptocurrencies trading down slightly at the time of writing. Bitcoin and Ethereum have both established levels of resistance over the past few days and are continuing to respect those levels. Although the markets are expressing some levels of stability around their current price levels, one analyst believes that further losses may be necessary in order to spark a rally.
Crypto Markets Flat, Face Growing Resistance
The markets have been caught in a tight trading range over the past several days, with Bitcoin trading between $3,700 and $4,000 and Ethereum caught in a slightly larger range between $130 and $156.
The upper end of both these ranges appears to have been established as resistance levels that have not yet been broken by bulls.
Yesterday, The Crypto Dog, a popular cryptocurrency analyst on Twitter, told his followers that Ethereum faces strong resistance around 0.04 BTC (approximately $151), which is slightly above where Ethereum is presently trading.
“$ETH / $USD isn’t about to go parabolic, not without $BTC making a major push… $ETH / $BTC is facing serious resistance at .04, it’s unlikely we cross it on the first try,” he said.
Furthermore, The Crypto Dog later explained that he isn’t going long on Bitcoin until its price drops lower, pointing towards the declining trading volume and largely dismissing the possibility of Bitcoin forming a bullish inverse head and shoulders reversal pattern.
“I love getting excited about inverse head & shoulders as much as the next guy, but until we see a change in this declining volume trend, I’d like us to fall lower before I try and long $BTC,” he explained to his followers.
Stock Market Recovers from Yesterday’s Plunge
Yesterday, all the major benchmarks dropped significantly, driven primarily by a revision of Apple’s Q1 guidance that signaled significant economic slowdown in China. This news caused Apple’s stock to plunge, and worried investors about the future of the global markets.
Despite this, stocks rallied today after the Federal Reserve Chairman Jerome Powell said that the central bank will be more patient on raising interest rates, and that they’d be more sensitive to the current market conditions.
Powell’s comments caused the Dow to surge over 3% to 23,389, the S&P to jump nearly 3.2% to 2,525, and the Nasdaq to climb over 4% to 6,722.
“As always, there is no preset path for policy… And particularly with muted inflation readings that we’ve seen coming in, we will be patient as we watch to see how the economy evolves,” Powell explained.
He further explained that the Fed would be monitoring economic growth and inflation, and that they are prepared to adjust their policy in order to keep economic expansion on track and to keep inflation near 2%.
“But what I do know is that we will be prepared to adjust policy quickly and flexibly and to use all of our tools to support the economy should that be appropriate to keep the expansion on track, to keep the labor market strong and to keep inflation near 2 percent,” Powell said.