Bull Trap Alert! Why Are Cryptocurrencies Falling?

Bitcoin has fallen below the critical level again. What level should investors watch for Ethereum?

At the time of writing, Bitcoin (BTC) price finds buyers at $ 19,600. The drop that has been going on for several hours has put altcoins in the red. Altcoins that are starting to lose critical support levels may be preparing for a major correction. Despite the good news in September, Ethereum also joined this caravan. So what awaits investors?

Bull Trap on Ethereum (ETH)

Ethereum price retested $1,600 in today's session. However, investors do not seem convinced of the move, as the formation of the Doji candlestick shows. On the weekly chart , ETH has formed a bearish Engulfing pattern. A downtrend pattern produces the strongest signal when it appears at the end of an uptrend. Since bearish candles can indicate the start of a chronic downtrend, it is helpful to consider an initial take profit level while remaining available for further bearish action.

Also on the daily chart, ETH breaks the neckline support with rising volumes, showing a break in the “Head and Shoulders” pattern. The neckline of the support is between $1,575 and $1,608 and it is moving towards $1,400 as the price stays below this level. At the time of writing, Ethereum finds buyers at $ 1,492. RSI (14) is trading below 50. When the relative strength index is below 50, it usually means that the losses are greater than the gains. The strongest support for now is $1,480 and ETH price is struggling to protect this area at the time of writing. If there are closes below $1,480 in the coming hours, we can see a new low for $1,350 or even lower for ETH.

Why Are Cryptocurrencies Falling?

The king cryptocurrency lost after breaching the $19,750 level several times. Investors may see more volatility. We have previously shared similar warnings on closings below $20,200 and $21,500. Unfortunately for now, the market is in favor of the bears and we are approaching the $16,000 target shared by Capo.

Despite the positive opening, the US markets turned their direction downwards. Losses in stocks also bring down cryptocurrencies. At the root of these dark clouds are the latest hawkish statements by Powell and the Non-Farm Employment Data, which will be released on Friday. If the data, which will be announced at 15:30 on Friday, is as high as the previous ones, this will pave the way for the FED 's 75bp increase. Solana has already lost support at $31 and other altcoins seem to be preparing for oversold as well. It may be helpful for you to review the critical support we share on our website.

Source: Fatih Ucar by coin-turk