- Bitcoin rose to new yearly highs over the weekend, retreated and settled for consolidation between $13,600 and $14,000.
- Ethereum recovered from the support above $370 only to face intense challenges at $400.
- Ripple has braced for an upswing after bouncing off the support at $0.23; bulls look forward to $0.26.
The bullish cycle, especially for Bitcoin and Ethereum, has continued to gain momentum over the last couple of weeks. However, the impact of Bitcoin’s rally to new yearly highs, as well as hitting a new 33-month high, has failed to trickle down to the rest of the crypto assets, which are wallowing in increasing selling pressure.
At the time of writing, the cryptocurrency market is mixed red and green. Intriguingly, most of the top ten digital assets performed relatively well. The decentralized finance (DeFi) sector is yet to find a bottom, with most tokens in the ecosystem having corrected by over 50% below their 2020 peaks. As reported, Uniswap is among the few projects showing signs of potential recovery.
High volatility in the market is likely to continue this week, especially for Bitcoin. Elections in the United States are around the corner. Hence outside factors that may impact price action could increase. Most traders are taking a hiatus from daily activities to minimize risk as they wait for stability to resume after the presidential elections.
Bitcoin consolidates ahead of a breakout to $15,000
The flagship cryptocurrency took off to new yearly highs over the weekend after June 2019 resistance was shattered. BTC pierced through the next key hurdle at $14,000 and exchanged hands at 33 months high before retreating under $14,000.
Support has been established above $13,600. On the upside, sellers appear to have camped at $14,000. In other words, BTC has settled for consolidation before another breakout comes into the picture. The Bollinger bands reinforce the sideways trading action and the possibility for significant gains in the near term.
Bitcoin bulls seem to have regained control over the price, especially after the price bounced off the Bollinger bands’ middle boundary. Besides, the Relative Strength Index (RSI) has also emphasized the bullish outlook after it bounced off the midline.
BTC/USD 4-hour chart
It is worth mentioning that the bullish outlook will be invalidated if Bitcoin slipped below the Bollinger band middle boundary. Besides, buyers need to guard the support at $13,600 as if their lives depended on it. Otherwise, the bellwether cryptocurrency may plunge to refresh the anchor at $13,000.
Ethereum recovery hits temporary setback
The smart contract giant rallied from last week’s crucial support provided by the 200 SMA in the 4-hour timeframe to levels slightly above $400. This price action was supported by a breakout from a bull flag pattern. ETH/USD also crossed the 100 SMA and the 50 SMA but did not sustain gains beyond $400.
However, the stalled momentum seems to be a temporary setback, mainly when the RSI is considered. The indicator shows the strength of a trend, in this case, the ongoing bullish price action. Ethereum must reclaim the position above $400 for recovery to $420 to materialize. For now, the path of least resistance is upwards despite the short-term seller congestion.
ETH/USD 4-hour chart
It is worth mentioning that that bullish narrative will be invalidated if Ether gets rejected at $400. Downward price action may overshoot the 50 SMA and retest support at $390, as shown by the 100 SMA. Further correction from this level is likely to send Ethereum back to the drawing board at 200 SMA.
Ripple looks forward to a breakout
The cross-border cryptocurrency was saved from a potentially massive breakdown that targeted lows under $0.2 by support formed above $0.23. Recovery ensued, but XRP failed to rise beyond the descending trendline.
Resistance at $0.245 also capped the price movement, hence the delay in achieving gains towards $0.26. However, the Moving Average Convergence Divergence has emphasized the bullish grip by grinding upwards to the midline.
To confirm the bullish outlook, buyers must push XRP above the resistance highlighted by the moving averages; the 50 SMA and the confluence formed by the 100 SMA and 200 SMA in the 4-hour range. With all these hurdles in the rearview, Ripple will most likely embark on the journey of breaking barriers, aimed at testing $0.26 and $0.3, respectively.
XRP/USD 4-hour chart
Looking at the other side of the picture, the expected breakout will be sabotaged if XRP fails to gain enough momentum to take down the moving averages’ resistance and the hurdle at $0.245. A reversal under $0.24 could also open the Pandora box, resulting in more losses that might revisit support areas at $0.23 and $0.22, respectively.