• Bitcoin price shows a steady downtrend that could bounce from the support level at $29,936.
  • Ethereum price is on the verge of a reversal as it recoils from the demand zone extending from $2,106 to $2,397.
  • XRP price looks bearish as it slid below a critical resistance area that stretches from $0.90 to $1.17.

Bitcoin price seems to be facing trouble after the crash on May 19. Ethereum, Ripple and other altcoins have promptly followed the pioneer cryptocurrency south

China tightens the noose around mining

Although other factors played a role, the primary reason for the recent sell-off seems to be attributed to China’s crackdown on Bitcoin and cryptocurrency mining. The latest reports indicate that major mining pools like BTC.TOP and HashCow will suspend their operations as the Vice Premier Liu He-led State Council committee announced the newest clampdown on Friday.

While China is stringent regarding trading Bitcoin and virtual currencies, this is the first time it has turned its scrutiny toward cryptocurrency mining.

Bitcoin price shows signs of life

Bitcoin price looks to surge 40% as it bounces off the support level at $29,936. The daily chart shows that BTC is forming a potential reversal pattern known as head-and-shoulders. This setup contains a central dip referred to as the head, while the other two of comparable depths are known as shoulders.

The swing highs have experienced a sell-off forming horizontal support at $29,936, known as the neckline. A retest of the said demand level will most likely result in a quick run-up to $42,000, forming the right shoulder. A breakdown of the neckline will result in a breakout from this technical formation, projecting a 53% sell-off to $13,891. 

This target is obtained by measuring the distance between the head's highest point and the neckline and adding it to the breakout point.

Additional support for this bearish thesis comes in the form of a bearish crossover between the 50-day and 100-day Simple Moving Averages (SMA). This setup is obtained when the 50 SMA moves below the 100 SMA, signaling a rise in the short-term selling pressure. Therefore, investors need to keep a close eye on the demand barrier at $29,936. Other levels of interest include the demand zone extending from $21,864 to $23,835 and $19,703.

BTC/USD 1-day chart

BTC/USD 1-day chart

While the scenario explained above is highly bearish, the bear rally might be cut short at the levels detailed above. Regardless of the pessimistic outlook, if BTC slices through $42,000 and produces a daily candlestick close above $43,000, the bearish thesis will face invalidation. Under these conditions, the flagship cryptocurrency could rally 5% to test $45,000

Ethereum price hints at a reversal

Ethereum price has followed Bitcoin and depreciated roughly 25% since May 19. However, the Momentum Reversal Indicator (MRI) has flashed a buy signal in the form of a green 'one' candlestick. This setup forecasts a one-to-four candlestick upswing. 

Additionally, this bullish sign comes as ETH trades in the demand zone, ranging from $2,106 to $2,397. 

Therefore, a decisive close above $2,400 will confirm the uptrend thesis. Moreover, a potential spike in buying pressure around this level could propel the altcoin pioneer upward by 15% to tag the 50-day SMA at $2,789.

If the bid orders continue to pile up, ETH price might rise another 7% to tag the swing high formed on May 20 at $3,000. Other critical resistance areas include $3,117 and $3,442.

ETH/USD 1-day chart

ETH/USD 1-day chart

On the flip side, if Ethereum price slices through $2,098, producing a daily candlestick close below it, it will put an end to the optimistic narrative and kick-start an 11% sell-off to $1,850.

Ripple eyes a quick bounce amid mounting pressure

Ripple price has sparked a minor uptick as it bounced off a support level at $0.793. Although an upswing seems likely, the supply zone extending from $0.90 to $1.178 will hinder the move. Additionally, the 200 twelve-hour SMA at $0.927 will be the first deterrent. Therefore, clearing this will be crucial for an uptrend to establish itself.

Investors can expect XRP to rise roughly another 25% to $1.02 from the current position ($0.823) before exhausting or taking a u-turn.

XRP/USD 12-hour chart

XRP/USD 12-hour chart

If XRP price slices through $0.639, the bullish outlook explained above will face invalidation. In that case, Ripple could slide 12% to $0.566.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Ripple price sees investors bracing for Powell late Wednesday with $0.44 in the cards

Ripple price sees investors bracing for Powell late Wednesday with $0.44 in the cards

XRP price will see traders mainly focusing on the Powell speech later today at the Brookings Institution. With many questions being raised and Fed members contradicting one another, markets will be hanging on every word coming from Powell’s mouth to get a clearer view of what the path will be going forward.

More Ripple News

ECB director calls for Bitcoin ban, says BTC is not suitable for payments or investments

ECB director calls for Bitcoin ban, says BTC is not suitable for payments or investments

The European Central Bank (ECB) detailed its stance on Bitcoin (BTC) and the cryptocurrency ecosystem in a blog post on November 30. In this article, the financial institution outlined the stark differences between regulation of digital assets in Europe and the US and that they should not be legitimized. 

More Bitcoin News

Solana price in for a surprise as markets expect Powell to bring out the reindeers

Solana price in for a surprise as markets expect Powell to bring out the reindeers

Solana price is at the cusp of starting the long-awaited Christmas rally. SOL could be seen jumping 37%, making it its best performance for the year.

More Solana News

Three on-chain metrics suggest Bitcoin price has bottomed, here’s where BTC is going next

Three on-chain metrics suggest Bitcoin price has bottomed, here’s where BTC is going next

Bitcoin price has triggered a 5% upswing overnight, slicing through critical hurdles. Three on-chain metrics suggest that BTC might have bottomed and has kick-started another bear market rally.

More Cryptocurrencies News

Bitcoin: Assessing chances of one last bear market rally for 2022

Bitcoin: Assessing chances of one last bear market rally for 2022

BTC is in a good place to trigger another bear market rally from a high-time frame perspective. This development, combined with the optimistic outlook seen in on-chain metrics, further strengthens the possibility of a happy ending to 2022.

Read full analysis

BTC

ETH

XRP