A popular crypto trader says only a miracle can change the trajectory of the two largest crypto assets by market cap.
In the latest TechnicalRoundup newsletter, pseudonymous crypto analyst Cred says Bitcoin (BTC) needs an “imminent and strong rally” to maintain the support zone that has been held since June of 2021.
Cred says the probability of a further drawdown will increase if the rally fails to materialize.
“With only one week left until the monthly close, absent an imminent and strong rally, May will close as a macro range breakdown.
Even if the market rallies following the monthly close, that rally must be treated as a bearish retest of support turned resistance at $35,000 to $37,000.
To summarize, the market must form some miracle rally this week to fix what appear to be monthly and weekly range breakdowns. If that doesn’t happen, any subsequent rallies into the low-mid $30,000s are bearish retests, and continuation lower becomes much more likely.”
According to Cred, Bitcoin could drop by over 50% from the current level in the worst-case scenario if the range breaks down.
“Should the market continue to trade lower, our downside objectives are around $20,000 (200-week moving average, prior cycle’s all-time high) in the medium-term and plausibly as low as $14,000 on the monthly time frame.”
Bitcoin is trading for $29,624 at time of writing.
Turning to Ethereum (ETH), Cred says that the second-largest crypto asset also needs a strong rally before the end of May.
According to Cred, Ethereum needs to close above $2,300 to prevent a collapse of the support zone that it has consistently closed above since April of 2021.
“Ethereum/Dollar could also use a final week miracle rally.
There is a macro range, the range appears to be broken (pending the close next week), the range breakdown is bearish until there is a strong move back above support. For Ethereum/Dollar, that would require a monthly close above $2,300.”
Cred says that he is targeting Ethereum to fall by over 40% from the current levels if the second-largest crypto asset sees a range breakdown.
“As far as downside targets if the aforementioned move back into the range doesn’t happen, there is a lot of confluence around $1000 (200-week moving average, monthly support, round number).”
Ethereum is trading for $1,960 at time of writing.