Bitcoin price, Ethereum and other cryptocurrencies are bleeding, and global markets are reluctant to provide any band-aids or bandages to stop the bleeding. Investors are turning their back on cryptocurrencies as a storm is rolling through the markets, with the stock market correction as the most significant cause of the turmoil. With cryptocurrencies on the chopping block, expect to see more losses eked out into the weekend as support levels are still far off.
Bitcoin (BTC) price is dropping like a stone as gravity seems to pull BTC price further to the downside in search of support. Where Isaac Newton had a headache after the apple fell on his head, investors must have a migraine after the forces of gravity hit the cryptocurrency markets. Although on a weekly basis Bitcoin price is not printing its worst performance yet, the correction is enough to accelerate capital outflows as investors flee riskier assets.
BTC price currently resides under the $25,000 mark and is now set to see more bleeding as increasing numbers of investors pull their money out. This capital outflow will only enlarge moves to the downside as buy-and ask prices diverge further away from each other, triggering more significant moves, in this case, to the downside. Expect to see some bullish resistance around the monthly S3 near $24,688, but once that is completely broken down, the road is clear for a 25% drop towards $19,036.22, sub $20,000.
BTC/USD weekly chart
With this market reshuffle, it is just a matter of time before the tipping point is reached and markets reverse. As the Relative Strength Index (RSI) is trading oversold, bears have lost their compass on when to take profit, and as a result, a turnaround could be lurking just around the corner. Expect BTC price to reverse back to $30,000 – not instantly, but after first testing $28,695.13, following the golden rule that as a previous support level it is destined to become resistance.
Ethereum (ETH) price looks set to repeat its worst week last year, which occurred around May 17. ETH price is already losing around 25% for the week, and more losses are set to be booked by the weekend as investors flee the scene. With high capital outflows from cryptocurrencies, the swamp is set to be drained, and it is hard to determine when the bottom will be reached, as technical indicators are all pointing to severely oversold moves.
ETH price is currently still trading in a distribution zone already discussed in the past, between $1,841 and $1,720. For now, that distribution zone is still holding up and seeing buying, supporting price action. In case some more dollar strength kicks in, together with capital outflows, it could be the sucker-punch that knocks investors KO and triggers ETH price to drop towards $1,404, which is the last line of defence before it starts trading below $1,000 and sparking an existential crisis.
ETH/USD weekly chart
With downside moves comes opportunity, and a lot of traders – not the faint-hearted of course – will scope up some price action at these historic lows. By doing so, price action sooner or later will need to wind back up as bears will want to book profits sometime soon. This way, the elastic band gets some decompression, unwinds under more buying volume and will see a return towards $2,200 or $2,400 into next week.
Ripple (XRP) price sees bulls give way to bears as downside pressure becomes unmanageable. A technically bearish death cross has formed, and this, along with the cap provided by the 55-day Simple Moving Average, the red descending trend line and the fact that for five weeks in a row, price action has been unable to close above the monthly pivot, investors seem to be having enough of trading ETH price on a trial and error basis. There are just too many reasons not to invest in Ripple price than there are to invest.
XRP price will either be able to hold around $0.3616, or if a weekly close occurs below that level, expect to see another leg lower towards $0.1729, which will drag XRP price below $0.20. That means that XRP price will be halved yet again and, in total, will have lost 90% overall from nearly $2.00 all the way to $0.20. The cold shower that traders and investors are undergoing at the moment will probably trigger some dislike or mistrust that will keep big investors away for some time.
XRP/USD weekly chart
A weekly close above $0.3616 would be good for morale and could see mild buying all the way back to $0.4974. Although still subdued, a recovery rally could be sparked once equities can tie up with gains again. A rally or several winning streaks in equities could create a tailwind for cryptocurrencies that would lift XRP price even to $0.70.
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