Bitcoin short-term support: $74,500–$75,500; short-term resistance: $77,500–$78,500
Ethereum short-term support: $2,150–$2,200; short-term resistance: $2,280–$2,330
On the news front, last night’s nonfarm payrolls came in at 165,000, versus expectations of 65,000. The unemployment rate was 4.1%, also lower than expected. Average hourly earnings rose 0.4% month over month, beating expectations as well. The figures for the previous two months were also revised upward by 84,000. The US economy is simply too strong: employment is solid and wages are rising. This has undoubtedly given the Fed strong support to remain hawkish. After the data came out, the probability of a rate hike in December jumped straight to 72%. The dollar strengthened, and the 10-year US Treasury yield neared 4.9%. But from Bitcoin’s perspective, this isn’t “good news.” The economy is strong, rate hikes keep coming, and liquidity isn’t loosening. After the three major headwinds of a sharp US stock-market plunge, the Binance crisis, and election-related setbacks, this was another blow. The charts show Bitcoin breaking below $75,000, but markets have always come out healthier after a shakeout!
Technically, Bitcoin wicked down to around $74,800 last night, finally reaching the inside of the key support zone between $73,000 and $75,000. Fortunately, it was only a wick, which shows that support around $75,000 is holding and a rebound is possible. Three points: First, looking only at the price levels, $74,800 is almost exactly in line with the $74,900 level where the price broke out on September 15. This suggests the earlier breakout was valid and the market is still in a delayed uptrend; this is just a normal pullback within that trend. And since this level was hit amid three major bearish factors and then pushed down further, it may be an even more genuine test.
Second, looking at the moving averages, my feeling is: dark clouds overhead, but feet firmly on the ground. In other words, the 60-, 30-, 10-, and 5-day moving averages are clearly bearishly aligned and are converging toward the 120- and 250-day moving averages. The short-term outlook is cloudy and not encouraging; it will take time to recover. But looking at the medium-term 120- and 250-day moving averages, the 120-day average is at $75,000 and the 250-day average is around $72,800, and they are still bullishly aligned. I think it won't be easy to get above the medium- and long-term averages, but neither will it be easy to break below them. So if the spring is compressed further, that could actually create an opportunity for a rebound.
Third, the daily MACD has already moved below zero, which tells us two things: the correction has been sufficient, and Bitcoin is now very weak in the short term. I have a habit of using two criteria to judge whether a trend correction is complete: first, the daily MACD returns to the zero line or falls below it; second, the MACD forms a bullish crossover. If the crossover occurs below zero, it should happen at least twice. Now we just have to wait for the MACD bullish crossover.
Ethereum is stronger than Bitcoin in the short term because this correction hasn't made a new low. But over the medium to long term, the 120-day moving average is around $2,280 and the 250-day moving average is around $2,150. Ethereum is now between these two averages, rather than above both of them like Bitcoin. So over the medium to long term, Ethereum is still weaker than Bitcoin and is following Bitcoin's lead rather than leading the market.
