Bitcoin (BTC) has closed the week above a strong support as it keeps on testing the 38.2% fib extension level. The price is showing signs of weakness while it remains below the 38.2% but it is important to note that the more it tests this level, the more likely it is to eventually break above it. The probability of BTC/USD climbing above $10,000 still remains quite high even though the price has started the week in red and has declined below the support it closed above. The price is still highly likely to close the week above the $9,508 mark. We can use the NVT indicator to see when the price risks further downside and when it doesn’t. If we take a look at the indicator, we can see that the times it traded below its RMA, the price continued to decline.
Similarly, when it remained above the RMA, the probability of a rally remained higher and we saw a move higher. The NVT indicator was also a good indicator that would have come in very handy around the $6,000 mark when the price cut through the key resistance zone and kept on surging upwards. If we take a look at the RSI, there is plenty of room for further upside. On the daily time frame, we have yet to see the price break above a key falling wedge. This move to the upside is likely to push the price to $10,800 or higher to test the trend line support turned resistance. This is quite a move to the upside but it is important to realize that the risks outweigh the rewards here.
If we take a look at Ethereum (ETH), we can see that the price is trading within an ascending channel. As long as it respects this ascending channel, we are likely to see further upside. However, it is important to realize that ETH/USD will have to break below this ascending channel sooner or later. For now, it is likely to outpace Bitcoin (BTC) which is why it may be a good idea to be bullish on altcoins short term. That being said, the price of Bitcoin (BTC) is ready to decline to the 21 Week EMA and subsequently to lower levels soon as the price begins its downtrend from here. The same goes for ETH/USD which will crash hard soon as the price breaks the trend line support. This means that the comparatively small move to the upside that we expect from here may not be worth it compared to the downside that is likely to follow ahead.