Bitcoin Price Outlook: Speculative Buying Sends BTC/USD, ETH/USD to Multi-Month Highs

Bitcoin, Ethereum Talking Points

• Bitcoin price (BTC) tests multi-months high as bulls aim for $25,000.

• Ethereum eases back from $1,700 but speculative frenzy keeps prices steady.

• PPI (producer price inflation) beats estimates, sending S&P 500 lower. Yet, cryptocurrency resilience holds.

Bitcoin Challenges Six-Month Highs, Ignoring Risks of Higher Rates

Bitcoin prices have risen to their highest levels in six months, increasing the potential for the major cryptocurrency to retest $25,000.

Despite the elevated fundamental risks, major cryptocurrency have remained resilient, ignoring the risks of higher rates and a hot PPI (producer price inflation) print.

DailyFX Economic Calendar

While Fed officials continue to confirm the need for more aggressive measures to tame persistently high inflation, market participants have favored speculative assets, lifting BTC back toward $25,000.

With the current daily high holding around $24,895, the 13% rally from Mondays open ($21,376) has allowed BTC/USD to rise above the January high, now providing support at $23,954.

As crypto enthusiasts aim to reignite the uptrend responsible for driving BTC to an all-time high of $69,000 (in November 2021), the surge in bullish momentum has pushed the RSI (relative strength index) to the boarder of overbought territory.

While price action currently remains above both the 50 and 200-day MA (moving average), a potential shooting star formation provides additional caution for the short-term move. In technical analysis, the candlestick pattern occurs at the end of a strong uptrend and is considered to be bearish in nature.

Bitcoin (BTC) Daily Chart

After rising to a high $24,895 earlier today, a rejection of the upper wick at resistance drove prices back below $24,500. As a result, a low-bodied has formed at the bottom of the wick, suggestive of indecision.

For BTC/USD to break higher, bulls will need to clear a few technical hurdles. The first big challenge will be for buyers to drive prices above $25,000 and return to the August high of $25,212. Above that, is the May 2022 low at $25,401 which leaves the door open for the 61.8% Fibonacci retracement of the 2020 – 2021 move at $28,737.

Bitcoin (BTC/USD) Key Levels

Ethereum (ETH) Price Action

Much like its major counterpart, Ethereum prices have failed to gain traction, pushing prices below $1,700. After a brief retest of $1,712, failure to drive momentum above the current month high of $1,714 (2 Feb) placed pressure on price action, forcing prices lower.

As ETH/USD returned to the November high around $1,6788, a single line on the daily chart and the lack of a candlestick body has highlighted the resilience of this zone.

With the 61.8% retracement of the August – November move holding as support at $1,664.82, a move lower could assist in driving price action toward psychological support at $1,600.