What's the Next Move for Bitcoin and Ethereum?

Bitcoin is still considered as the currency of the Dark Web, despite the fact that  it was the world’s best performing currency in the recent 2 years. Now 1 Bitcoin is worth 2 Ounces Of Gold which is significantly important in the financial world as the digital currency continued it’s outstanding performance with +150% year-to-date. However,  there has been a lot of headlines lately as the world’s new favorite cryptocurrency Ethereum stole the show with an outstanding +5,000% rise in value since January before the price stabilizing around +3,000%.

Moving on to the technical charts , we’ll be using Elliott Wave Theory among other tools like distribution and cycles to help us identifying the potential path for both of the crypto-currencies and prepare traders and investors for the next move according to these scenarios.

BTCUSD cycle from 2015 lows is still in progress, the instrument found support each time it did a corrective pullback in 3 , 7 or 11 swings and currently it has the potential to add another leg higher toward $3250 – $3500 at minimum before ending wave III. However we need to keep in mind that the third wave is usually the strongest one and can keep extending to the upside. Consequently, it’s not recommended to sell it and until the pivot at 06/15 low (2120) gives up you should keep trading with the main bullish trend.

Bitcoin 4H Chart
Bitcoin 4H Chart

If the pivot at 2120 low gives up and Bitcoin manage to break below the ascending trend-line then wave III could be already in place. In that case, it will be looking to make a double three correction to the downside from June peak and look to reach $1930 – $1725 which will represent the next buying area for a 3 waves bounce at least.

Bitcoin 4H Alt Chart
Bitcoin 4H Alt Chart

The overall picture for Bitcoin remain bullish and it will either rally from current levels or extend the correction before buyers show up again. So there is no need to panic about a deeper pullback and try to focus on the bigger picture.

Switching to Ethereum, the digital currency ended up by correcting the entire cycle from the lows and it reached the 50% of the rally around $205 which provided a bounce from there. Consequently, the move higher has the potential to reach equal legs area $615 – $712 and even extend toward $870 it it turns out to be the 3rd wave of an impulsive move.

Ethereum Daily Chart
Ethereum Daily Chart

However, unlike Bitcoin,  ETHUSD still didn’t break above the recent 06/29 peak and has a higher risk of  breaking below $203. So if it manage to do it then it can extend the correction to the downside toward $100 – $60 area where buyers would be expected to show up for a new bounce higher at least.

Ethereum 4H Chart
Ethereum 4H Alt Chart

Ethereum is currently the best performing currency for 2017 and it still has the potential for further gains in the second half of the year if the price manage to break above 06/12 peak. The move is expected to happen when Bitcoin starts it’s next leg higher which will drive more power to the rest of the cryptocurrency market was extremely volatility in the recent months presenting a lot of risk for traders. So unless you are a long term investors who doesn’t need to follow the daily movements, then you need to have a good system and use the proper risk management to protect your account.

This author has no positions in any stock mentioned and does not plan to open any positions in any stocks mentioned for at least 72 hours after publication of this article.

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