Bitcoin's recent rebound gained momentum this week following the Federal Reserve's interest rate decision, pushing the cryptocurrency toward a critical resistance level. Market expectations of a rate cut fueled Bitcoin's upward movement, although slight profit-taking over the weekend brought a minor pullback to the $58,300 range. This limited retreat suggests that the upward trend retains potential for continuation.
With the rate cut now materialized, the market has responded positively, and the impact is expected to resonate over the medium to long term. Bitcoin broke through the midline of the descending channel at $61,200 with strong volume but now faces short-term resistance near $63,600.
This level represents a key Fibonacci retracement point from the August rally and could lead to further profit-taking during the weekend. If this occurs, Bitcoin may test support within the $60,700–$61,200 range—a crucial zone between the channel midline and the three-month exponential moving average.
Holding above this support could pave the way for a breakout above $63,600, targeting the $68,000 range. However, resistance at $65,950 (Fibonacci 0.618) remains a significant hurdle. With a positive crossover in Bitcoin's short-term exponential moving averages, the overall trend appears robust.
If Bitcoin avoids a deeper retracement and swiftly breaks above $65,950, it could challenge the key resistance zone at $69,270. A breakout above the descending channel and a move toward $70,000 would signal the end of lower highs and potentially push Bitcoin toward new all-time highs.
Conversely, a failure to hold above $63,600 followed by a break below $60,700 could indicate a bearish turn, possibly leading to a retest of $58,300.
Ethereum's Critical Support and Resistance Levels
Ethereum has lagged behind Bitcoin, showing slower recovery after experiencing significant selling pressure in August. In early September, it dipped to a low of $2,150 before finding support near this year’s lowest levels.
This week, Ethereum made a significant move by breaking through a major resistance zone, successfully rebounding after a third recovery attempt. Now trading back in the $2,500 range and breaking above a short-term descending trendline, Ethereum’s momentum has improved. The last time Ethereum broke this trendline was in July, but gains were reversed due to panic selling following the Bank of Japan’s rate hike.
Currently, Ethereum is attempting to sustain its position above the trendline. The $2,480 level, representing the 0.236 Fibonacci retracement, has become a strong support. As long as Ethereum remains above this level, the next targets are $2,640 and $2,770.
Breaking above these levels would signal a trend reversal and open a path toward $2,900. On the downside, the short-term exponential moving averages and the stochastic RSI—still above 80—continue to support Ethereum’s recovery.
However, if Ethereum fails to hold above $2,480, a deeper decline may follow, potentially guided by the trendline.
Weekend Market Outlook for Bitcoin and Ethereum
The weekend is critical for both Bitcoin and Ethereum. If profit-taking occurs, support levels will be essential to monitor. Strong defense by buyers could set the stage for a bullish start to the new week, while failure to hold these levels may invite renewed selling pressure.
Market participants are closely watching macroeconomic signals and institutional flows for directional cues. Historical patterns suggest that weekend liquidity can amplify price movements, making risk management crucial for traders.
Long-term investors may view any dip as a potential accumulation opportunity, given the fundamental strength of leading cryptocurrencies. For those looking to monitor real-time market movements and technical indicators, explore more strategies tailored for crypto volatility.
Frequently Asked Questions
What does a Fibonacci retracement level indicate in crypto trading?
Fibonacci retracement levels help traders identify potential support and resistance areas based on historical price movements. These levels are widely used to anticipate where prices might pause or reverse during trends.
How do interest rate decisions affect Bitcoin and Ethereum?
Interest rate changes influence investor sentiment and capital allocation. Lower rates often weaken the dollar, making assets like Bitcoin and Ethereum more attractive as alternative investments.
What is the significance of breaking a descending trendline?
Breaking above a descending trendline often signals a potential reversal from a downtrend to an uptrend. It indicates growing buying pressure and can lead to further upward momentum.
Why is the $70,000 level important for Bitcoin?
The $70,000 zone represents a psychological and technical barrier. A sustained break above it could reaffirm bullish sentiment and attract institutional interest, potentially leading to new all-time highs.
How can traders manage risk during volatile weekends?
Using stop-loss orders, monitoring leverage levels, and staying informed about market news can help manage risk. Diversifying across assets and time frames may also reduce exposure to sudden swings.
What role does trading volume play in confirming breakouts?
High trading volume during a breakout adds credibility to the price move. It indicates broad market participation and increases the likelihood that the breakout will sustain rather than reverse.