Bitcoin Support, Ethereum Breaks Out; Solana and Cardano the Focal Points
Bitcoin (BTC/USD), Ethereum (ETH/USD), Solana (SOL/USD), Cardano (ADA/USD) talking points:
- Alt coins continue to be the focal point of the crypto world, with Solana showing a near 90% gain over the past week.
- Cardano had previously been bid as the coin started to move towards the NFT space; and it was an NFT offering on Solana that’s brought a massive impact there.
- The analysis contained in article relies on price action and chart formations. To learn more about price action or chart patterns, check out our DailyFX Education section.
Alt coins continue to impress and while Cardano pushed up to a fresh high last week, it’s been Solana that’s been stealing the show of recent. Solana is up over 90% from the low of a week ago, helped along by the rush into NFTs or Non Fungible Tokens. Solana launched the ‘degenerate ape academy’ as NFTs with more than 10k units sold initially. And given that buyers needed Solana cryptocurrency to purchase the NFTs, this led to a strong rush in demand that saw the coin push up to as high as 130.00 earlier today.
On the chart below, we can see the pullback playing-in, with prices quickly pushing down for a test of trendline support, taken from August 26th and 29th swing lows.
Solana Four-Hour Price Chart
Cardano Congestion Just Under Resistance
We’ve talked about a cryptocurrency making a push into the NFT space before by enabling smart contracts to be built on their blockchain; and this is somewhat of the explanation for the recent rally in Cardano. Cardano, the ‘green cryptocurrency’ that was created by Ethereum co-creator, Charles Hoskinson, announced the Alonzo hard fork which was intended to allow for smart contracts to be coded on to that blockchain, as well. This could mean competition in the NFT space for Solana and Ethereum, but it’s also been behind the bullish push in Cardano over the past month that’s propelled the coin higher by as much as 300% during the month of August.
It appears as though some of that interest may have moved over to Solana, however, as prices in Cardano have been digesting over the past week, taking on the form of a symmetrical wedge pattern. This can even give the appearance of a bull pennant formation when meshed with the prior bullish trend, keeping the door open to bullish potential with focus on the 3.0000 psychological level that has yet to be tested in ADA/USD.
Cardano Four-Hour Price Chart
Bitcoin Testing Fibonacci Support
As attention has been cast towards alt coins of late, Bitcoin continues to digest the month-long ramp that ran from late-July into last week.
The resistance that I had looked at last week has helped to mark that high, coming in at a key Fibonacci level around the 50k psychological price. There’s also been short-term resistance showing at the two other levels identified at 49,436 and 48,190, with support now holding around the Fibonacci level at 46,847, which is the 50% marker of the Jan 22 – mid-April major move.
Bitcoin BTC/USD Four-Hour Price Chart
Ethereum Forces a Break Even as Bitcoin Coils
Perhaps its owed to the recent run in NFT interest but, even as Bitcoin continues to coil Ethereum has broken out to another fresh three-month-high. Ether had been in a range for almost three full weeks, with resistance establishing around the 3,300 marker.
This morning saw prices break out to a fresh three-month-high, but buyers didn’t get very far as price action quickly reverted back for a support test around prior resistance. This can keep the door open for topside approaches in Ethereum, looking for a hold of higher-low support to lead to a test of another fresh higher-high.
Ethereum Four-Hour Price Chart
— Written by James Stanley, Senior Strategist for DailyFX.com
Contact and follow James on Twitter: @JStanleyFX