Sheldon McIntyre, CMT
Ethereum price and XRP unlock from resistance levels, turning them to support and aggressively pursue higher prices. In contrast, Bitcoin price reaches a new rally milestone with a daily close above the 200-day simple moving average (SMA) at $44,985.
Cryptocurrency investors now need to consider that the three crypto majors show a high probability of a corrective process, either in time or price. Still, the medium-term remains bullish as each is clearing technical inflection points with relative ease.
The Crypto Fear & Greed Index published by Bybt.com has climbed over 70, putting the Index reading in the upper percentile (greed), going back to the beginning of 2018 and suggesting that a temporary top may soon emerge.
The Index focuses on Bitcoin and considers five factors: volatility, market momentum/volume, social media, surveys, dominance, and trends. The objective is to have a real-time view of the cryptocurrency market behavior regarding emotional reactions to price. For example, extreme fear can signal a buying opportunity, while excessive greed projects a market due for a correction.
Crypto Fear & Greed Index – Bybt.com
It is essential to understand that the Index is not a timing tool but a gauge of Bitcoin sentiment, and as a result, the broader cryptocurrency complex.
Nevertheless, the dynamic separation of Bitcoin from relevant resistance levels coupled with the broadening momentum to altcoins does indicate that the market may be getting a little frothy.
Bitcoin price has now climbed almost 57% over the last 22 days, marking one of the better 22-day returns since 2018 and placing the bellwether cryptocurrency above the strategically important 200-day SMA at $45,120. It is an impressive return after BTC logged a bullish outside week on the bar charts from the 50-week SMA in late June.
In the short term, Bitcoin price confronts overbought conditions based on the daily Relative Strength Index (RSI) and the heightened bullish sentiment outlined by the Crypto Fear & Greed Index. Moreover, BTC needs to battle the technical resistance presented by the 50% retracement of the April-June correction at $46,849 and the April 25 low of $47,044.
Adding to the potential for a BTC pullback is the emerging bearish momentum divergence on the intra-day charts as the RSI has not been confirming the recent Bitcoin price high.
BTC/USD 9-hour chart
The depth of a BTC corrective process should be limited to the previous trifecta of resistance between $41,322 and $43,106 and reinforced by the 38.2% retracement of the April-June correction. The total pullback would be near 12% from the current price.
However, if Bitcoin price fails to locate support in the specified range above, BTC is at risk of a severe correction that may reach the confluence of the June 29 high of $36,675 with the 50-day SMA at $38,220, representing a 20% drop from the current price.
BTC/USD daily chart
Bitcoin price may opt to extend the rally, dismissing resistance. If that is the case, the new layers of resistance rest with the 61.8% and 78.6% retracement levels at $51,109 and $57,173, respectively.
Bitcoin price is at an inflection point, but the magnitude of the BTC momentum has rekindled the altcoin market, raising investors’ risk appetite and broadening market participation.
Here, FXStreet's analysts evaluate where BTC could be heading next as it sits on stable support with no resistance ahead.
The 82.68% rally of Ethereum price over the last 22 sessions is beginning to reach the levels recorded earlier this year and matches the 2018-2020 numbers, hinting at an overbought condition.
Equally remarkable is that Ethereum price has only closed with three negative sessions over the last 22 days, including one session that closed with a doji candlestick pattern and a loss of only -0.64%. The relentlessness of the rally has not provided potential ETH investors with many opportunities to enter the market.
Nonetheless, a continuation of the upside may soon be thwarted by a bearish momentum divergence on the intra-day charts, alerting ETH investors to position for a period of weakness.
ETH/USD 9-hour chart
Short-term upside potential could be limited to the 61.8% retracement of the May-June correction at $3,358, which coincides closely with the high of the May 19 collapse at $3,444.
ETH/USD daily chart
An ETH pullback will be well supported by the previous resistance between $2,913 and the 50% retracement level at $3,042, representing an 11% fall from the current Ethereum price.
An inability to stabilize in the range does create a challenge for Ethereum price, with support not emerging until the June 15 high of $2,640 and then the July 7 high of $2,411. It would be a tremendous setback for ETH but an unlikely scenario.
Regardless of the extreme bearish scenario, Ethereum price has demonstrated the impulsiveness corresponding to a genuine cycle low and the basis for new ETH highs moving forward.
Here, FXStreet's analysts evaluate where ETH could be heading next as it faces no opposition toward $4,400.
The 76.80% advance from July 21 has carried the daily RSI to the highest reading since the April high. However, unlike Bitcoin and Ethereum, XRP price is not flashing a bearish momentum divergence on the intra-day charts, implying the Ripple rally is only getting stronger, not weaker, despite the exceptional gain already logged.
The 10% advance today is the type of confirmation that accompanies a sustainable breakout from a critical resistance level, such as the XRP price breakout on August 7 above the 200-day SMA.
The acceleration of the rally has lifted XRP price towards the measured move target price of the double bottom pattern at $0.953 and within another strong day of the second Ripple profit target at $1.00 or the third target of $1.06, generating a 30% from the August 7 close.
The $1.00-$1.06 range will be a challenge to overcome, but if XRP price is successful, Ripple will quickly target the 50% retracement of the April-June correction at $1.23.
XRP/USD daily chart
The XRP price rally is a legitimate end to the correction and beginning of much higher prices from a technical perspective. Still, it is imperative not to overlook the ongoing legal battle with the SEC. If Ripple suffers a temporary defeat in the proceedings, it may negatively influence XRP price.
A news-driven reversal should strike substantial support at the 200-day SMA at $0.802 and the neckline of a multi-year inverse head-and-shoulders pattern around $0.770.
Relentless, impulsive and persuasive are three words to describe the rally of the three major cryptocurrencies since July 21. Relentless, because there have been few down days. Impulsive because the gains associated with the advance have reached compelling levels in a short time. Persuasive because each cryptocurrency has dismissed previously considered formidable resistance with relative ease. In all, the rally has transitioned to an advance with long-term bullish implications.
Here, FXStreet's analysts evaluate where Ripple could be heading next as it seems primed to breakout.
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XRP price is traversing a bullish pattern on a higher time frame and is presently bouncing off a stable support level. If this uptrend continues, Ripple will likely more than quadruple its market value in the coming days.
Bitcoin price shows considerable strength after springing from the recent crashes. Still, it is uncertain whether the current bullish impulse will morph into a new uptrend or lead to a more profound decline.
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