Bitcoin BTC/USD fell more than 3% lower during Friday’s 24-hour trading session in tandem with the S&P 500, which was suffering a fourth-straight bearish day of heavily declining prices.
Ethereum ETH/USD and Dogecoin DOGE/USD were weaker than Bitcoin, sliding about 5% under Thursday’s closing price.
The downturn in the general market and the crypto sector came after Federal Reserve Chair Jerome Powell crashed the Wall Street party on Wednesday with predictions inflation would remain stubbornly high in 2023 and the unemployment rate would rise to more than 4%.
Prior to the grim outlook, the market rallied on weaker-than-expected consumer price index data that showed inflation ticked lower in November, which pulled Bitcoin and Ethereum higher. Dogecoin didn’t join the party and declined more than 24% since Nov. 30.
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The Bitcoin Chart: Bitcoin’s slide on Thursday caused the stock to drop back into a sideways trading pattern, which had been holding the crypto between $16,000 and $17,580 since Nov. 11. Friday’s plunge on continued bearish momentum caused Bitcoin to lose support at the eight-day and 21-day exponential moving averages, which was bearish at least for the short term.
Some mild support near the $16,800 pattern developed over the last month and bullish traders would like to see Bitcoin close Friday’s session above that level. If that happens, Bitcoin could consolidate sideways in the upper range of the sideways channel over the weekend.
Bitcoin has resistance above at $17,580 and $19,915 and support below at $16,797 and $16,000.
The Ethereum Chart: Ethereum broke down from a sideways channel on Friday, negating its current uptrend by printing a lower low. For a downtrend to confirm, Ethereum would need to eventually bounce to print at least a lower high on the 24-hour chart.
Unlike Bitcoin, which was trading on declining volume, Ethereum’s drop came on increasing volume, which was a bad sign for the bulls. Eventually, Ethereum would likely enter a consolidation phase and begin to trade sideways. If that happens, bullish traders would want to see the crypto print a series of candlesticks with lower wicks to indicate accumulation might be taking place.
Ethereum has resistance above at $1,245 and $1,412 and support below at $1,081 and $997.
The Dogecoin Chart: Dogecoin’s downtrend had been taking place between two parallel lines, which settled the crypto into a falling channel pattern on the 24-hour chart. The pattern is considered to be bearish until a stock or crypto breaks up above the upper descending trendline of the channel on higher-than-average volume.
On Friday, Dogecoin was testing the lower trendline of the channel and bouncing up from the level. If Dogecoin continued to trend lower within the channel, bullish traders want to see the crypto bounce up off the 200-day SMA if Dogecoin retraces to that area.
Dogecoin has resistance above at $0.083 and $0.091 and support below at $0.075 and $0.07.