Bitcoin continues to decline while altcoins are consolidating hold near key support levels post slight decline and rebound price action.
The price action of top cryptocurrencies are well in line with my predictions posted on Wednesday with both Bitcoin and major altcoins seeing further downside price action. While several factors have been mentioned as trigger for the meltdown, there is a whole group of investors and analysts out there who still continue to believe that the ongoing decline is temporary and the price is likely to rebound like a whiplash in near future.
The argument for rebound is based on the fact that Bitcoin’s hash rate remains high despite ongoing market price decline. While the hash rate did decline earlier this week, it rebounded shortly and is currently well near all time highs of 121 quintillion h/s seen earlier this month.
While there may be a possibility for sharp rebound in near foreseeable further, the immediate future is a different matter. Bulls have nothing to hold-on to and help digital coins with their recovery which suggests that cryptocurrencies are likely to test yet another psychological support level breaching past several strong hurdles along the week.
Bitcoin: The scenario for originator of modern day cryptocurrency doesn’t look too good at the momentum. In fact the picture surrounding Bitcoin hasn’t changed at all aside from the fact that the momentum surrounding decline has slowed down a bit. The slowdown in price decline was influenced by news of rebound in Bitcoin hash rate but the positive influence from same was hardly enough to help stop the ongoing bearish rally.
The only good thing that came out of this update was rebound of Bitcoin back above $8000 handle post its descent into $7800 handle in previous session. For now, the BTCUSD pair is trading in consolidative manner above 8K handle and is currently at $8109.5 handle down by 3.93% on the day with a market cap of US$ 145.36 Billion down by US$ 8.17 Billion since last Wednesday.
When looking from technical perspective, the picture remains the same as price is seen moving well within descending channel territory and is seeing consolidative price action within wider price band limits ranging from $8350 to $7466 price range as mentioned in previous article.
The price is still moving well below all three key SMA’s – 9, 50 and 100 while RSI indicator is seeing its signal line moving downwards in oversold region near 20 both of which suggest ongoing bearish trend is likely to remain solid during the weekend.
Ethereum: Ethereum, the most valued altcoins continues to fight against strong bearish pull from crypto bears as trading session heads to weekend. Eth bulls has displayed serious level of grit and determination this week albeit price seeing sharp declines in the global market.
While Bitcoin’s decline influenced momentum pushed the pair below key support level it had managed to rebound back above the support price mark. The ETHUSD pair is currently trading at $166.04 down by 2.46% on the day with a market cap of US$ 18.05 Billion down by nearly US$ 320 Million. Ethereum still continues to trade positive against Bitcoin in the global market as evident from the price action of ETH/BTC pair so far this week.
When looking from technical perspective, bulls and bears are fighting tooth and nail for control of price momentum in which bears seem to be on the losing side.
There is considerable amount of supply near mid-$160 handle which keeps the pair moving in range bound fashion near $165 handle. While price’s movement below all three key SMA’s which act as trend indicators hint at prevalent bearish bias, the signal line of RSI indicator used to measure price momentum continues to hold steady above oversold region near 36 level which suggests the pair is likely to consolidate hold above $160 handle and move range bound between $170 to $160 handle during the weekend.
Even in case of a downward breakout, the pair is unlikely to see sharp declines as there is yet another price handle with considerably supply preventing downside movement at $154 price handle.
Ripple: Ripple, the third most valued cryptocurrency in terms of market capitalization is seeing a relatively unchanged price scenario. While altcoins are affected in general by ongoing bearish market momentum and Ripple in itself is seeing dovish price action, when looking at price action from daily and weekly perspective, the price had hardly faced any serious loss during the second bearish price surge this week. Given the fact that Ripple had declined below its major psychological price level, it is relatively immune to short term bearish influences.
In fact, the overall market cap of Ripple has increased since the same time last Wednesday with XRPUSD trading at $0.2397 handle and has a market cap of US$ 10.52 Billion up by US$ 140 Million.
The price is still moving below 9, 50 and 100 SMA’s which suggests short to medium term trend remains in favor of bears. However, RSI indicator is seeing signal line flat line well above oversold region and is at 38 mark which suggests there is little to no chance of sharp declines in immediate and near future trading session.
A look at price action in 5 hour and one day charts make it clear that the pair has now entered consolidative price action slightly above yearly lows. The XRPUSD is set to see range bound price action trapped between 0.2470 to 0.2363 price range for rest of the day and during the weekend’s trading session.
For the pair to resume bullish price action, it needs to breach strong resistance found near 0.2667-0.2691 handle which has considerably volume of limit orders piled up from speculative trade bets made by scalpers and trend based short term traders.