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, BTCUSD 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, ETHUSD 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.