• Bitcoin price mean reversion could trigger a 25% drop.
  • Ethereum faces at least a 16% drop to cover existing Ichimoku gaps.
  • XRP could outperform Bitcoin and Ethereum by consolidating instead of selling-off.
Bitcoin price action remains extended from its weekly Tenkan-Sen, suggesting a retracement is likely to occur. Ethereum price, like Bitcoin, is exposed to significant gaps on its weekly Ichimoku chart. XRP price may surprise market participants by outperforming Bitcoin and Ethereum for the first time in many months.

Bitcoin price overextended, deep retracement incoming

Bitcoin price continues to have significant gaps between the bodies of the weekly candlesticks and the weekly Tenkan-Sen. Gaps between the Tenkan-Sen and candlestick bodies generally resolve over five to six periods, a period that Bitcoin is currently at the end of. Therefore, unless Bitcoin were to consolidate and trade sideways, the next move is for Bitcoin to travel lower to return to the Tenkan-Sen.
BTC/USD Weekly Ichimoku Chart
 
However, given the extended nature of Bitcoin's drive, some deeper profit-taking may occur and traders may instead push Bitcoin even lower to the confluence zone of the Kijun-Sen and 2021 Volume Point Of Control at $48,250. The bearish outlook will be invalidated if Bitcoin creates new all-time highs.

 

Ethereum price faces return to $3,800

Ethereum price action is very top-heavy and due for a pullback. The price structure is almost identical to Bitcoins, but Ethereum may be more susceptible to a deeper retracement due to the consecutive seven-week bullish candlesticks. In addition, the 61.8% Fibonacci expansion at $4,500 has acted as a reasonably strong resistance level. 
 
The most critical level to watch is the Composite Index, which has a bearish pennant. Additionally, the Composite Index has three lower peaks, while the candlestick chart has printed three higher peaks, creating bearish divergence.
ETH/USD Weekly Ichimoku Chart
 
Given the current time cycle and extended price action, invalidation of the bearish outlook may be difficult to terminate. Significant and sustained highs beyond the more recent new all-time highs would need to be sustained.

 

XRP price may trade sideways, limiting downside risks

XRP price is currently against a robust series of price levels, creating a firm support level. Between the price levels of $1.08 and $1.14, the daily Kijun-Sen, Senkou Span A, Senkou Span B, and 2021 Volume Point Of Control all reside. 
 
XRP is above all of those levels, showing some resilience and strength, while Bitcoin and Ethereum show weakness. As a result, XRP is better positioned to consolidate at its present value area rather than sell-off.
XRP/USDT Weekly Ichimoku Chart
 
However, threats to the downside remain for XRP. Currently it is inside a bear flag and faces all of the risks associated with that bearish continuation pattern. In addition, traders will want to watch for any daily close below $0.99 as that could trigger a flash crash to test the $0.60 value area. 

 


Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Ethereum continues hinting at rally following reduced long liquidations

Ethereum continues hinting at rally following reduced long liquidations

Ethereum has continued showing signs of a potential rally on Tuesday as most coins in the crypto market are also posting gains. This comes amid speculation of a potential decline following FTX ETH sales and normalizing ETH risk reversals.

More Ethereum News

HBAR price jumps 75% as BlackRock tokenizes Money Market Fund on Hedera

HBAR price jumps 75% as BlackRock tokenizes Money Market Fund on Hedera

Archax, Ownera and The HBAR Foundation have enabled the first tokenization of BlackRock’s money market fund (MMF) on Hedera. Last year Hedera Council member abrdn’s successfully tokenized its MMFs on Hedera. 

More Hedera News

Bitcoin price holds above $66K as Morgan Stanley files prospectus to add BTC ETF exposure in two of its funds

Bitcoin price holds above $66K as Morgan Stanley files prospectus to add BTC ETF exposure in two of its funds

Bitcoin (BTC) price remains range-bound, holding above the $63,000 level, while its upside is capped below $68,000, going against or delaying the assumption that the fourth halving would be a 'sell-the-news' outcome. 

More Bitcoin News

Crypto community reacts as BRICS considers launching stablecoin for international trade settlement

Crypto community reacts as BRICS considers launching stablecoin for international trade settlement

BRICS is intensifying efforts to reduce reliance on the US dollar after plans for a stablecoin effort surfaced online on Tuesday. Most people expect the stablecoin to be backed by gold, considering BRICS nations have been accumulating large holdings of the commodity.

More Cryptocurrencies News

Bitcoin: BTC post-halving rally could be partially priced in Premium

Bitcoin: BTC post-halving rally could be partially priced in

Bitcoin (BTC) price briefly slipped below the $60,000 level for the last three days, attracting buyers in this area as the fourth BTC halving is due in a few hours. Is the halving priced in for Bitcoin? Or will the pioneer crypto note more gains in the coming days? 

Read full analysis

BTC

ETH

XRP