Trading: technical analysis of the price of Bitcoin and Ethereum
Trading: technical analysis of the price of Bitcoin and Ethereum

Trading: technical analysis of the price of Bitcoin and Ethereum

By Federico Izzi - 9 Sep 2022

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This article will comment in detail on the technical analysis of the price of Bitcoin (BTC) and Ethereum (ETH).

The macroeconomic environment in Europe

Yesterday, the European Central Bank netted another substantial interest rate hike, increasing interest rates by 75 basis points after the 50 basis point hike in July.

Basically, the rate on main financing operations is rising from 0.50% to 1.25%.

In simpler terms, it means that the Frankfurt-based institution now lends money wholesale to financial institutions at 1.25%. As a result, the cost of money has increased, which will discourage the level of consumer demand. 

If, on the contrary, you are a bank and leave money in the ECB‘s current account you get 0.75% interest per year.

The European financial institution that controls the monetary policy of the 19 countries of the European Union aligns itself with the decisions on tightening already put in place by the Federal Reserve, which has put in place a consecutive series of hikes since last March, currently setting the benchmark rate between 2.25 % and 2.5 % for US citizens.

The statement issued by the ECB suggests that with inflation already “too high,” it is very likely that decisions will be made for further rate hikes as early as the next meetings of the year.

Thus, the economic situation becomes more uncertain and complicated for Europeans, who are already caught in the grip of historically high inflation, rising commodity prices, especially energy prices, and governments trying to find ways to help struggling families and businesses, while on the other hand they will have to cope with an increase in variable-rate mortgages and a reduction in liquidity wanted by the Central Bank to prevent prices from rising.   

There is a risk of a financial short-circuit that could further weaken an already precarious economy.

A first signal comes from the euro/dollar exchange rate, which after a sudden return below parity recovers to 1.01, after sinking to 98 cents at the beginning of the week, the lowest level in 20 years.

The crypto sector responds positively to the weakening dollar by coloring the day green, pushing the weekly balance to head into the positive for the second consecutive week.

trading btc eth
Technical analysis of BTC and ETH prices

Bitcoin (BTC) – technical analysis

The queen of crypto at mid-day puts in the best rise among the BlueChips, climbing over 9 percent and prices above $ 21,100, the highest level since the beginning of the month.

Recovery of the psychological threshold of $20,000 brings back new purchases and a boost that will have to be confirmed over the weekend.

As speculated in the previous update on Wednesday, the reversal of the BTC price indicates the beginning of the new monthly cycle with the lows recorded earlier this week, between Tuesday 6 and Wednesday 7 September.

Therefore, it becomes important to continue with the uptrend over the weekend and witness the breakthrough of $22,000 to chase away any doubts and start laying the groundwork to reengage the August highs at $24,000.

Ethereum (ETH) – technical analysis

Positive day also for the price of ETH, which moves back above $1,700, confirming the structure of the new monthly cycle that began in late August.

ETH‘s technical structure is clearer and more defined, helping to develop a more precise analysis.

Assuming we are close to the middle of the monthly cycle, by early next week prices should push above today’s levels.

If confirmed, we do not rule out the possibility of revisiting the $1,800 area shortly.

On the other hand, should this not be the case and prices return below $1,500, it will be necessary to pull out of any short-term trading and wait to clarify the correct technical structure and the holding of the short-term supports identified at $1,500 and $1,450.

Federico Izzi

Financial analyst and independent #trader – S.I.A.T. & partner. He operates actively on stock and derivatives markets (futures and options) since 1997. A precursor of cyclic-volumetric analysis he is known for having identified the most important upward and downward movements in the financial markets of recent years. He participates annually as a speaker at the ITForum in Rimini since the 2010 edition and InvestingRoma and Napoli since the first edition of 2015. He is a guest and market expert on the "Trading Room" and "Market Driver" broadcasts of Class CNBC, Borsa and on the evening news of Traderlink. Since July 2017 he is a permanent guest on LeFonti.TV, the only weekly national space dedicated to cryptocurrencies alongside the most important international experts in the field. He was interviewed as a cryptocurrency expert for Forbes Italia, Panorama, StartupItalia and DonnaModerna. He was recognized as the first Italian technical analyst to have published the first secular cyclic analysis on Bitcoin. Periodically publishes articles on ITForum News, Sole24Ore, MILANOFINANZA, TrendOnLine and Wall Street Italy. Federico Izzi is... "Zio Romolo".

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