Bitcoin and Ethereum face a dangerous week after yearly highs

Bitcoin and Ethereum start this new week hesitantly, as crypto traders prepare to face a busy news from an economic point of view.

BTC/USD, which peaked at $31,035 on Friday, is reluctant on Monday to hold above $30,000. For its part, ETH/USD, which has been one of the best cryptocurrencies last week, accentuated its gains up to $2140 on Sunday, posted a more limited recoilcurrently standing at $2100.

The positive impact of Shapella and Fed rate expectations evaporates

Recall that the last week was particularly bullish for the two most important cryptocurrencies on the market. Indeed, BTC, ETH and the digital asset market in general have benefited from a pullback in forecasts of rate hike from the Fed of investors.

Several data, in particular those relating to consumer prices and producer prices, came out below market forecasts, which revived the paris of a break in the Fed’s rate hike.

Note, however, that at the end of the week, these rate expectations were subject to doubts, while speeches by Fed members prompted to show themselves plus prudent in anticipation of the end of the monetary tightening cycle.

As for Ethereum, the crypto enjoyed an additional bullish factor, with the success of the Shapella update, which explains why ETH is showing a best performance than BTC.

However, as the new week begins, the positive impact of these factors is waning, and investors are waiting for the next catalystswhich explains the short-term hesitation on BTC and ETH.

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What to watch for to trade Bitcoin and Ethereum well this week

This week, the evolution of market expectations about the Fed will remain a key factor in the evolution of Bitcoin and Ethereum. In this regard, it should be noted that the consensus, being rooted in a 0.25% rate hike for the FOMC meeting at the beginning of May, the question that now arises is whether the Fed will raise its rates again in June or not.

In this context, the avalanche of quarterly results from American banks expected this week could have a decisive influence. Indeed, the wind of panic that blew through the banking sector a few weeks ago had a clear positive impact on cryptocurrencies.

This was the case not only because the difficulties of the banks reduce the likelihood rate hike by the Fed, but also, because the setbacks of the banks highlight the advantages of cryptocurrencieswhich do not depend on trusted third parties.

In this context, poor results for US banks this week could support cryptocurrencies, reigniting fears about the stability of financial institutions. Likewise, strong numbers for banks could further dismiss the risk of further turbulence on banks.

What is the technical background on BTC/USD and ETH/USD?

From a technical analysis point of view, it is first important to point out that the weakness of Bitcoin and Ethereum since their recent annual highs in no way calls into question the underlying bullish bias.

Bitcoin reluctant to hold above $30,000

The bitcoin pricewhich started the correction phase currently on Friday morning, is currently hesitant to hold above $30,000, actively testing this key support.

Although a break below this threshold would not nothing reassuringit is only in the event of a return below $29,350/29,000 that the bullish bias visible on the daily chart would really be called into question.

The first key support is found at $2000 for Ethereum

About the cours Ethereumthe backdrop is slightly different, with ETH accentuating its gains through Sunday, hitting an 11-month high at $2,140.

The cryptocurrency is currently hovering around $2100, and the next support important is the psychological threshold of $2000. However, a break below $1940 would have to be observed to consider that the positive profile is beginning to be invalidated.

Source : Original

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