Ethereum (ETH), Bitcoin (BTC) Post Active Weekend
It was a big weekend on the crypto markets, featuring heavy volatility across the entire asset class. On Sunday, Ethereum ETH and Bitcoin BTC both exhibited massive price action and extreme traded volumes. Most notable was a short-term crash in ETH , with prices falling to $1730.00 before quickly rallying above $2400.00.
On the crypto news front, Fed Governor Lael Brainard issued comments earlier today regarding a Fed-sponsored central bank digital currency (CBDC). Here is Brainard’s key quote from the engagement:
“I think some cryptocurrencies are very different, in some cases, from more traditional financial assets. I do believe that in the context where we maintain the role of safe central bank money as a foundation for the payment system, there’s a lot of room for competition and innovation to flourish.”
Brainard’s comments have been received well by the crypto community. Daily gains in Bitcoin (+19.25%), Ethereum (+38.15%), and Ripple (+28.37%) have ticked higher since the prepared remarks were delivered at Coindesk’s Consensus 2021. Perhaps the biggest news from Brainard’s address is that she revealed the Boston Fed worked throughout 2020 on researching CBDCs. Partnered with the MIT Digital Currency Initiative, the Boston Fed is planning to publish findings later this summer. Will this be the first step in a Fed CBDC? It certainly appears to be.
For ETH, values are well off of all-time highs above $4,000. Fortunes of the crypto have certainly changed in a matter of only a few weeks.
Ethereum (ETH) Slumps Below $2,500.00, Bitcoin (BTC) Near $38,000.00
On the 4-hour chart below, ETH is in the midst of a 24-hour, 43% rally. For the time being, a short-term bullish bias is warranted as $2500 comes back into view.
Trade Idea: If we see ETH pull back to the 4-hour SMA, a scalping opportunity may come to pass. Until today’s Wall Street close, I’ll have buy orders in the queue from 2210.00. This is a scalp trade, so we are looking for a quick $100 profit with an initial stop loss at 2075.00.
For Bitcoin, prices are in no man’s land beneath 38,000. At this point, traders are wondering if BTC values will ever reestablish themselves above $40,000.
Overview: There’s no doubt about it, Bitcoin is under fire. Like ETH, BTC has lost roughly half of its value from late April all-time highs. For now, a neutral bias is warranted as BTC attempts to hold the line at $35,000. We’ll see if bidders step up to the plate or if a washout under $30,000 is in the cards.