With the recent development of the market, BTC and ETH have reached an important testing point.
First, look at BTC: Currently, it has retraced to 125,000, which is right at the lower edge of the previous oscillation range, and also at the upper edge of the oscillation range from May to July, a typical support-resistance conversion critical point.
As long as it does not fall below 112,000, the market still has a chance to oscillate at a high level, or even rebound again. But it is important to note that from the daily technical perspective, a typical new high divergence has appeared, which is a clear bearish signal. If it falls below 112,000 subsequently, do not hold onto fantasies, as it is likely to adjust to the 100,000-102,000 range.
In this process, if you choose to short, you must set a stop loss to avoid quick recoveries after the market drops, causing unnecessary passivity.
Next, look at ETH: Since August, it has gone through a standard 5-wave upward structure, then entered a corresponding 3-wave correction, and has now fallen more than 15%. This morning it hit a low of 4060, slightly below the key support near 4090.
This is both the previous high from April and December 2020, and it is close to the Fibonacci level, so it has certain short-term support.
Looking down, the trading volume between 3940-4090 has expanded, which may become a new support range. It is difficult to break through all at once. However, if BTC falls below 112,000, then ETH is likely to continue to decline.
Overall, the market is currently at a critical position. BTC's 112,000 and ETH's 4090 are both core points that determine the subsequent trend. If they hold, oscillation or rebound is still hopeful; if they break, then adjusting with the trend will be the main theme. The market does not need to be blindly optimistic, nor is there a need to panic excessively; just focus on the key points and act accordingly.
—— Follow me, avoid chasing highs and cutting losses, and grasp the largest trends with the least operations.
