Bitcoin, Ethereum Continue To Chug Higher, Confirming Long-Term Trend Change: How To Trade It

Bitcoin BTC/USD and Ethereum ETH/USD confirmed weekly uptrends on Sunday after trading in daily uptrends since March 14, when the cryptos bounced up from the $37,560 and $2,499 levels, respectively, according to Benzinga Pro.

On March 24, Benzinga pointed out that Bitcoin looked to be headed toward the $45,000 level and Ethereum appeared to be on track for $3,400, levels which the cryptos bust through over the weekend.

An uptrend occurs when a stock consistently makes a series of higher highs and higher lows on the chart and the larger the timeframe the uptrend takes place on, the stronger the chart pattern is.

The higher highs indicate the bulls are in control while the intermittent higher lows indicate consolidation periods. Traders can use moving averages to help identify an uptrend with rising lower timeframe moving averages (such as the eight-day or 21-day exponential moving averages) indicating the stock is in a steep shorter-term uptrend and rising longer-term moving averages (such as the 200-day simple moving average) indicating a long-term uptrend.

A stock often signals when the higher high is in by printing a reversal candlestick such as a doji, bearish engulfing or hanging man candlestick. Likewise, the higher low could be signaled when a doji, morning star or hammer candlestick is printed. Moreover, the higher highs and higher lows often take place at resistance and support levels.

In an uptrend the "trend is your friend" until it’s not and in an uptrend there are ways for both bullish and bearish traders to participate in the stock:

• Bullish traders who are already holding a position in a stock can feel confident the uptrend will continue unless the stock makes a lower low. Traders looking to take a position in a stock trading in an uptrend can usually find the safest entry on the higher low.
• Bearish traders can enter the trade on the higher high and exit on the pullback. These traders can also enter when the uptrend breaks and the stock makes a lower low indicating a reversal into a downtrend may be in the cards.

See Also: Bitcoin Nears $47K Level, Pulls Up Ethereum And Dogecoin: What's Driving The Crypto Rally?

The Bitcoin Chart: Bitcoin was trading up about 1.7% higher on Monday after rallying 5.43% on Sunday. The move over the $45,000 was expected after the crypto broke up from a bull flag pattern on March 22, which Benzinga called out the day prior.

• On Sunday, Bitcoin made a higher high above the high of $45,426 that was printed the week of Feb. 28, which confirmed the crypto is trading in a weekly uptrend.
• Also on the weekly chart, Bitcoin closed the week above the 50-day simple moving average (SMA), which indicates longer-term sentiment has turned bullish.
• On the daily chart, Bitcoin may find resistance at the 200-day simple moving average, which is the bellwether for determining if a security is in a bullish or bearish cycle. If Bitcoin is unable to push through the 200-day on its first time, it may consolidate lower for a few days in order to gather power. If this happens, Bitcoin could form another higher low on the daily chart, which could also give traders and investors who are not already in a position a solid entry point.
• The lower high may come over the next few 24-hour trading days because Bitcoin’s relative strength index (RSI) is registering in high at about 71%, which indicates the crypto is in overbought territory.
• Bitcoin has resistance above at $48,475 and the $50,000 psychological level and support below at $45,814 and $42,233.

Want direct analysis? Find me in the BZ Pro lounge! Click here for a free trial.

The Ethereum Chart: Ethereum was trading over 3% higher on Monday with continued bullish momentum after rising by 5.19% on Sunday. Like Bitcoin, the move higher was expected after Ethereum broke up from a bull flag pattern on March 23, which Benzinga called out on March 21.

• Ethereum confirmed that it’s trading in a weekly uptrend on Sunday, when the crypto printed a higher high above the high of $3,045, which was formed the week of Feb. 28.
• On the daily chart, Ethereum has not printed a higher low since March 20 and will eventually need to retrace lower within the uptrend. Like Bitcoin, this may come if Ethereum rejects at the 200-day SMA, which is just slightly above the current price.
• Traders can watch for a reversal candlestick, such as a doji or hammer candlestick, to form to indicate the higher low is in or watch for a bull flag to develop under the 200-day SMA.
• Ethereum has resistance above at $3,610 and $3,802 and support below at $3,413 and $3,240.