Bitcoin, Ethereum will be volatile before the merger.
Key receivers
Bitcoin has lost more than 2,000 points in market value in the last 24 hours. Similarly, Ethereum nosedived 7.5%, erasing recent gains. The decline has put BTC and ETH at risk of a steep correction.
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Volatility hit the cryptocurrency market before Ethereum moved to Proof-of-Stake. As a merger nears, Bitcoin and Ethereum appear to be gearing up for a major price move.
Bitcoin and Ethereum at risk
Bitcoin and Ethereum have retraced more than 7% in the last 24 hours, which increases the risk of a step correction.
The recent selloff may have taken investors by surprise as more than $220 million worth of long positions were liquidated. A report that US inflation fell less than analysts expected in August seems to have overstated speculation on Ethereum's move to proof-of-concept. Now, it remains to be seen whether the “merger” will be able to “sell the news”.
The 50-day moving average rejected the advance of the pioneer cryptocurrency. As the price continues to decline, the nearest support level on the daily chart appears to be the lower limit of the parallel channel built over the past month. If this level at $18,700 fails to hold, a decline to the June 2019 high of $13,880 is expected.
Bitcoin needs to find the 50-day moving average at $22,000 as support to reject the bearish view and advance towards the 200-day moving average at $29,000.
Ethereum spells trouble as it appears to be forming a head and shoulders pattern on its daily chart. An increase in selling pressure that sends ETH below $1,500 confirms this hidden pattern. If this happens, a 30% correction can rise to $1,000.
It's worth noting that Ethereum would need to make a U-turn and post a daily close above $1,800 to reject the bearish trend. If this happens, ETH may find strength to break above the 200-day moving average at $2,100.
Given the amount of excitement surrounding the merger, an increase in turnover can be expected. It is important to wait for Ethereum's transition to proof-of-concept to better understand where the trend will resolve.
Disclosure: At the time of writing, the author of this article owned BTC and ETH.
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