- Bitcoin price uses dollar weakness to punch through the bearish defence.
- Ethereum price is set to pop 15% and reclaim the magic $3,500-level.
- XRP price trades at a discount as tailwinds are coming in with a delayed effect.
Bitcoin price, Ethereum and other cryptocurrencies are all using the window of opportunity this morning afforded by comments from the Vice-President of the ECB, de Guindos, that a July rate hike is in the cards. As a result the dollar index is dipping below 100 and is creating a gap to the upside in cryptocurrencies across the board. Expect to see a rally throughout the day and into the weekend as Macron is set to win the elections on Sunday, further weakening the dollar and translating into higher cryptocurrencies to come.
Bitcoin price breaking down the last line of defence for bears
Bitcoin (BTC) price pierced through $42,000 on Wednesday and, in the process, weakened resistance from the 55-day Simple Moving Average just below. For over a week now, the 55-day Simple Moving Average (SMA) has been acting as a cap on price action that bears have used to sell each rally in BTC price. With bears being pushed out of their positions, expect to see their stops hit soon, opening up more room and ground for bulls to cover to the upside.
BTC price will thus need to trade back above $42,000 and hit more stops placed by bears so that the demand-side can be further overwhelmed with volume as those bears will need to close their short positions by buying Bitcoin. That will result in a short-squeeze, with BTC price rallying towards $43,000. The leap is not far from $44,088.73, a historic pivot with the monthly pivot just below.
BTC/USD daily chart
The downside comes thanks to event risk over the weekend in the French elections. Should the far-right candidate Le Pen win the elections over the current ruling president Macron, that would mean a considerable risk and political uncertainty for the eurozone, with risk spilling over into global markets. The Greenback would be bid again and pop back above 100, causing headwinds for cryptocurrencies with BTC price falling back to support levels near $39,780, below $40,000.
Ethereum price jumpstarts its rally off the monthly pivot with $3,500 as the target
Ethereum (ETH) price sees bulls delivering a buy signal to investors and market participants. Although the close yesterday was a negative one against where ETH price opened, bulls were able to successfully defend the monthly pivot at $3,070.41. With Ethereum price opening above the pivot today, bulls performed a perfect classic-long-entry with a test on the pivot providing support and ETH price rallying from there.
ETH price has plenty of gas in the tank to rally higher as the Relative Strength Index (RSI) is slowly but surely ticking upwards above 50. Plenty of upside room, thus, with the buy-side volume not overheating, would put the RSI quickly in overbought and scare new investors away. The perfect scene is thus set for more upside to come as a tiered rally is poised to happen with $3,200, $3,3000 and $3,400 psychological levels to be watched, and used as anchor points in going to $3,500 in the coming weeks.
ETH/USD daily chart
Risk to the downside comes with the RSI not showing a bullish uptick which could indicate risks of a bull trap with buyers unable to keep price action above the monthly pivot. Bears would wait for a break below the monthly pivot and further pull price action down towards $3,000 near the 55-day SMA. In case that would break, a nosedive move could unfold towards $2,695, dropping 12% overall.
XRP price is awaiting the tailwinds to take effect
Ripple (XRP) price is still waiting for the aforementioned tailwinds to take effect. XRP price is even trading in negative numbers, but seeing the effect of the weaker dollar on cryptocurrencies, it is only a matter of time before support kicks in. Expect to see the XRP price dip back towards $0.73 in search of support before bouncing off and then seeing an exponential move above $0.7843 towards $0.80.
XRP price will have broken above a double banner of resistance with the 55-day SMA and the historic pivot at $0.7843, having kept price action muted for over a month now. Once $0.80 is reached, the way will be open for a rally up towards $0.88, returning 17% to investors with the monthly pivot and $0.8390 as levels to worry about. With the RSI below 50, there is plenty of room for a rally as a short-squeeze is due to restore the balance between buyers and sellers in XRP price.
XRP/USD daily chart
It could well be that the rejection bulls received on Tuesday against that $0.7843-level was instead a trigger where bears were able to build massive short positions. That would mean that bulls cannot match the volume behind this downward move as the scale tips in favour of bears with a break below $0.7304. Following such a break, expect bulls to flee the scene and open up room for bears to push price action even lower towards $0.70.
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.