What Do You Call a Market That Fails to Rally on Positive Catalysts?

This is a daily analysis by CoinDesk analyst and Chartered Market Technician Omkar Godbole.

Bitcoin: Powell brings bearish lower high

Bitcoin BTC$111,806.15 has retraced to levels last seen before Federal Reserve Chair Jerome Powell’s dovish remarks on Friday, which set expectations for a potential rate cut in September.

At the time of writing, BTC is trading just above $112,000, having peaked at around $117,440 on Friday. Technical scrutiny of the daily chart reveals that the pullback from the $117,000 peak has established a lower high in close proximity to the resistance line defined by the previous bullish trendline originating from the April lows.

This lower high reinforces the prior trendline breakdown, signaling a continuation of bearish price action. Complementing this observation, the Guppy Multiple Moving Average (GMMA) indicator is poised to confirm a bearish momentum shift, highlighted by the imminent crossover of the short-term exponential moving averages (white band) below the longer-term averages (red band).

On the weekly chart, the MACD histogram has initiated the new trading week with a sub-zero reading, highlighting the potential acceleration of downward momentum.

In summary, what do you say about a market that not only resists a sustainable rally on the back of favorable news – such as Powell’s speech – but also maintains a series of bearish technical patterns? I’ll leave it to the readers’ discretion.

Key technical support lies at the $110,756 level, corresponding to the lower boundary of the Ichimoku cloud, with a more substantial support zone marked by the 200-day simple moving average near $100,000. Conversely, reclaiming Friday’s high of $117,440 is essential to resurrect the bullish case.

• Support: $110,756, $100,887, $100,000.
• Resistance: $117,440, $120,000, $122,056.

Ether: Loss of upward momentum

Ether (ETH) printed a doji candle with a prominent upper wick on Sunday, signaling market indecision at record highs. This candlestick pattern forms when the opening and closing prices converge, reflecting a stalemate between buyers and sellers.

However, the relatively long upper shadow, in this case, means that the bull’s attempts to push prices higher faced significant pushback from bears, who managed to pull the price back down before the close.

While the doji itself does not guarantee a reversal, it highlights uncertainty and a possible loss of upward momentum. It warrants caution as it often precedes a potential reversal or a consolidation phase where the market awaits further catalysts for direction.

A pullback appears likely, as the 14-day relative strength index continued to print lower highs over the weekend, contradicting the new price high. The so-called bearish divergence indicates a loss of upward momentum and often yields corrections.

Interestingly, ether traded 3% lower on the day at $4,624 at press time, with charts indicating support at $4,065, the level from which ETH turned higher on August 20.

• Support: $4,065, $4,000, $3,805 (the 50-day SMA).
• Resistance: $5,000, record highs.

Read more: Bitcoin Reverses Powell Spike With a Flash Crash as Options Market Signals Jitters Ahead