Bitcoin may well end this trading week on a positive note. Although the Fed's interest rate decision has had a negative influence on the value of the flagship cryptocurrency, investors are still optimistic about it. Bitcoin recovered above $19k after the barrier of $18.1k was successfully protected.
On September 22, digital gold formed Bullish Engulfing and consolidated above the support zone of $19.2k. The rise came amid soaring trading volumes and increasing bullish activity. The bull trend will most likely end at this point and a consolidation phase will begin.
Technical analysis of BTC/USDBitcoin's technical metrics signal impending consolidation of the quote in a narrow range below $20k. The Stochastic Oscillator formed a bullish crossover, which signaled to buy the instrument, but then started moving down. The indicator is about to form a bearish crossover and fall below the green line.
Likewise, the Relative Strength Index advanced sharply but then started moving sideways. Meanwhile, the MACD is still moving sideways below zero and without any significant changes.
Technical indicators illustrate price stabilization with new bearish signals emerging on the daily chart, meaning BTC/USD is likely to resume the bear trend. Key bearish targets are seen at $19k, $18.6k-$18.8k, and $18.2k.
Correlation with S&P 500
The S&P 500 index also reflects the continuation of the bear trend on BTC. The correlation between the index and BTC swelled to the highest level ahead of the FOMC meeting. Therefore, the price is likely to move in a similar pattern again.
Bitcoin formed Bullish Engulfing when the S&P 500 was bearish. It is BTC that usually follows stock indices. Therefore, we can assume that the digital asset will soon be falling, like SPX.
ETH has been in the bear trend since September 10. Despite the successful Merge, the second-biggest cryptocurrency failed to stop the decline. In fact, the Merge is just part of the Ethereum network's transition to the PoS mechanism. Developers have announced several new updates so that the entire ecosystem could move to the PoS protocol.
A plunge in ETH/USD came due to miners' activities. According to OKLink, mining companies have sold 14,785 ETH coins since September 9. The highest sell trading volumes were recorded the day before the Merge, on September 14.
Technical analysis of ETH/USD
Despite the bear trend, ether managed to stop the fall and form Bullish Engulfing, as bitcoin did. The milestone of $1.200 was successfully defended. Today, the digital asset is trading near the $1,350 level.
Ether's technical metrics show the beginning of a consolidation phase and the possibility of the bearish continuation. The Relative Strength Index rose sharply but then started moving sideways on the daily chart. On the one hand, it reflects a decrease in buy trading volumes. On the other hand, it signals an increase in bearish activity.
The Stochastic Oscillator failed to leave the oversold zone. It formed a bullish crossover but then pulled back from resistance, which stands at line 20. The indicator has been unable to break through the barrier since September 15, which means ETH is likely to stay in the current trend.
Because BTC correlates with ETH, the digital assets are expected to show similar price patterns. Thus, a fall in SPX could trigger a drop in BTC, which, in turn, could be followed by a decline in ETH. The key bearish targets for the weekend are seen at $1,250 and $1,150.