dailyhodl.com
Cryptocurrency strategist Ali Martinez is issuing a caution on Bitcoin (BTC) after spotting a bearish divergence on two key metrics.
In a new post, Martinez tells his 32,700 followers on the X social media platform that the price of Bitcoin is climbing while the growth of the network is slowing down.
According to Martinez, the divergence between Bitcoin’s network growth and price is a “red flag”.
“It suggests the uptrend might not have enough momentum to sustain.
This bearish divergence between BTC price and network growth is an on-chain sell signal traders should be aware of.”
The cryptocurrency strategist says that the key levels to watch if Bitcoin turns downwards are at $34,300 and $30,200 where critical demand for BTC exists.
Bitcoin is trading at $36,173 at time of writing.
Turning to Ethereum (ETH), Martinez says that the second-largest crypto asset by market cap could turn bearish based on the readings of the Tom Demark (TD) Sequential indicator on the 3-day chart. The TD Sequential is used to identify key inflection points in the markets.
According to Martinez, the key level for Ethereum is in the $2,000 to $2,150 resistance zone as it forms an ascending triangle pattern on the 3-day chart. Ascending triangle patterns are typically considered bullish.
“A pullback from this resistance level [$2,000 – $2,150 resistance zone] could lead to a dip toward the [ascending] triangle’s hypotenuse at $1,700, setting the stage for a potential uptrend continuation.
Keep an eye on the crucial $2,150 level – a sustained 3-day candlestick close above this could negate the bearish outlook.”
Ethereum is trading at $2,010 at time of writing.
Generated Image: DALLE3