Crypto Daily: Future Correction of Bitcoin; Growth Ethereum and DeFi
The Bitcoin price has slightly increased over the past 24 hours — by 1.8% — and reached the level of $11,900. This is very close to its yearly highs. The trading volume is still low at $23 billion. Volatility over the last day was also small.
Let’s take a look at the Bitcoin chart:
Starting from the end of August, we see a strong uptrend that has been stopped at $12,100. During this time, a bullish wedge reversal pattern was formed on the chart. Given its structure, we can expect a decline to $9,600 within a few weeks.
Stochastic indicator is in the overbought zone and is forming a small bearish divergence. The unloading of the indicator will be a logical continuation, which corresponds to a fall in price.
RSI is near the upper border and will test it in the near future. However given the current weakness of the market, a scenario is more likely, after which the indicator will go down to the lower border.
For 3 days the price chart has been testing the upper border of the Bollinger Bands. 4 candles pierced it up. This means that now there should be a decline, first to the middle line, and then to the bottom.
Considering all of the above, we expect the Bitcoin price to decrease first to $11,500 and then to $11,000. This will also help unload the indicators and “throw off extra passengers”. Then, depending on the market situation, we could see a decline all the way to $10,000.
Ethereum
Ethereum tests at a strong resistance level, which is now around $400. The bulls have been trying to take this level for a week, but so far their attempts have not been crowned with success.
In previous articles, we wrote that the ETH requires consolidation with further correction. It will look logical and fit in with technical analysis. If you look at the chart now, you can see that the volatility of the Ethereum price dropped 3% per day. It indicates that a strong movement awaits us in the near future, and it is necessary to be ready for this.
The DeFi segment continues to grow at a rapid pace. News about them appears every day. Thus, the amount of collateral in this sector increased to $4.5 billion, although just six months ago this value was about $500 million. This clearly shows what serious hype is going on around DeFi.
This directly affects Ethereum. Its network is showing a significant increase in the number of active addresses and transactions. However along with this, network fees also are growing, which now amounts to $1,5 per transaction. It is 20 times more than at the beginning of 2020.
We need to remember that the Ethereum blockchain currently has limited bandwidth. And in the case of further hype around DeFi, transactions can start to get stuck, and this will inevitably lead to the falling of its price. Nowadays, few people think about it, but it must always be taken into account.
Altcoins
There is nothing to say about the rest of the market. All cryptocurrencies follow the movements of Bitcoin and do not form their own structure.
