Cryptocurrencies got a lift from some positive news after a week of continued declines with the market capitalisation dropping to $284bn. The US Securities and Exchange Commission (SEC) clarified that Bitcoin and Ethereum are not considered securities under the law. The statement came during a speech from William Hinman, Director at the Division of Corporation Finance at the SEC which caused Ethereum to spike by 12%. Prices had been dropping sharply since the South Korean Cryptocurrency exchange CoinRail was hacked, losing an estimated $28 million in altcoins. There are also reports that US regulators were investigating price manipulation at four major cryptocurrency exchanges.
On the daily chart, BTC/USD broke support at 6500 before bouncing back on the SEC news. If Bitcoin can break the 23.6% retracement and the resistance trend line at 7020, there may be a more meaningful recovery towards 8000 resistance. However, a decline below 6500 will again open the way to continuation towards 4900.
On the daily chart, ETH/USD met the target from the head and shoulders pattern identified in our previous report and is now getting a bounce. A break of the 23.6% retracement and horizontal resistance at 540 is needed for more gains towards 640. On the flip-side, bearish continuation and break 450 could see Ethereum decline to support at 360.
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