Key points to remember
- Bitcoin gained over 1,000 in market value early Monday.
- Meanwhile, Ethereum saw its price surge above $1,800.
- Technicals and fundamentals now point to further gains on the horizon.
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The total cryptocurrency market capitalization has increased by around $49 billion since the start of Monday’s trading session, helping Bitcoin and Ethereum post strong gains.
Bitcoin and Ethereum on the rise
Bitcoin and Ethereum started the week in the green, signaling the start of a new uptrend.
The leading cryptocurrency gained more than 1,000 points in market value after opening Monday’s trading session. The sudden spike in upward pressure surprised many cryptocurrency enthusiasts given the prevailing macroeconomic uncertainty. Still, Bitcoin appears to have breached a crucial resistance zone that could allow it to advance further.
From a technical standpoint, BTC bounced off the middle trendline of a parallel channel that had been developing on its daily chart. The technical formation suggests that it may now head towards the upper trendline at around $25,700. Bitcoin needs to continue trading above the $23,300 support level to reach its upside potential.
The on-chain data adds credence to the technical outlook, as IntoTheBlock’s In/Out of the Money Around Price (IOMAP) model shows that Bitcoin has developed a significant support floor. Around 1.4 million addresses bought over a million BTC between $22,650 and $23,325. The strong interest around this level could help contain any spike in profit taking, potentially allowing prices to rebound.
It should be noted that IOMAP shows little to no significant resistance ahead. The most considerable supply barrier is at $26,670, where 63,530 addresses have already purchased over 181,270 BTC.
Ethereum also gained significant bullish momentum today. Growing buying pressure helped ETH prices soar nearly 7%, hitting a high of $1,800 at press time. As speculation mounts around the long-awaited blockchain “merger” upgrade, it looks like ETH has more room to rise.
The second-largest cryptocurrency by market cap broke out of a symmetrical triangle that had developed on its four-hour chart. The height of the pattern’s Y axis suggests that Ethereum may now be entering a 22.5% uptrend. Further bullish momentum could help ETH validate the bullish outlook and hit $2,130.
On-chain activity also indicates a spike in interest in Ethereum. The number of daily new addresses on the network seems to be increasing, creating a series of higher highs and higher lows. The upward trend suggests that marginalized investors have been accumulating ETH around current price levels.
Network growth is often considered one of the most accurate price predictors for cryptocurrencies. Generally, a steady increase in the number of new addresses created on a given blockchain causes prices to increase over time.
Despite improving technical and fundamental conditions, ETH must continue to trade above $1,700 to continue its upward trend. If it breaks below the crucial level, it could face a selloff that invalidates the bullish thesis and triggers a correction to $1,600 or even $1,450.
Disclosure: At the time of writing this article, the author of this article owned BTC and ETH.
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