• Bitcoin price faces selling pressure after bearish US CPI data.
  • Ethereum price has developed a powerful buy signal on its Point and Figure chart.
  • XRP price converts into a bull market despite recent selling pressure.

Bitcoin price dropped below a critical Ichimoku level, but the pullback is likely only a return to equilibrium within the Ichimoku Kinko Hyo system. Ethereum price faced the same selling pressure as the rest of the cryptocurrency market, but the drop has now set up ETH with a powerful buying signal. XRP price outperformed BTC and ETH for the first time in nearly fifteen months.

Bitcoin price returns below the Cloud, Ichimoku gap-fill incoming

Bitcoin price has spent seven days with a significant gap between the bodies of the daily candlesticks and the Tenkan-Sen. This is significant because gaps between candlestick bodies and the Tenkan-Sen don't often last long – often correcting back to each other in four to six periods.

This 'gap-fill between the candlestick bodies and the Tenkan-Sen returns to equilibrium in the Ichimoku system. There are two methods in which this return to equilibrium occurs; the first is by price action returning to the Tenkan-Sen. The second and rarest is a return to equilibrium over time. In that scenario, Bitcoin price generally trades sideways, and the Tenkan-Sen slowly returns to price over time.

BTC/USD Daily Ichimoku Kinko Hyo Chart

The two scenarios for Bitcoin price are either a sideways trading range between $43,000 and $44,000 or a return to the Tenken-Sen at $41,000. $41,000 should be the maximum downside risk until next week. If there is bullish participation over the weekend, the upside potential will likely be limited to the top of the Ichimoku Cloud near the $49,000 to $50,000 value areas.

Ethereum price drop turns into bullish trade setup

Ethereum price was hit hard on Thursday after the CPI data – but nearly all risk-on assets were smashed lower. However, Ethereum's price action forms a trading opportunity that its peers have yet to display: a bullish continuation setup.

There is a hypothetical buy entry setup on Ethereum's $50/3-box reversal Point and Figure chart. The setup is a buy stop order at $3,350, a stop loss at $3,150, and a profit target at $4,400. The trade represents a 5.25:1 reward/risk with an implied profit target of 32% post entry.

ETH/USD $50/3-box Reversal Point and Figure Chart

What makes this hypothetical long entry so enviable is the combination of Point and Figure patterns that enhance the likelihood of a profitable setup. The entry confirms two bullish patterns: Triple-Top Breakout and a Bear Trap. Ideally, Ethereum price would print one more O at $3,000 and create a Bearish Fakeout setup.

If Ethereum price prints an O below $3,000, the buying opportunity is invalidated for Ethereum price.

XRP price breaks a bear market trendline, return Ripple to bull mode

XRP price recently broke the bear market trendline on its $0.02/3-box reversal Point and Figure chart. That break occurred when XRP tagged the $0.92 price level, but it promptly sold off from there. The resulting price action is very similar to Ethereum's – almost exact.

While the pattern on the Point and Figure chart looks like the same Triple Top Breakout and Bear Trap setup, it is augmented slightly due to the current O-column being the first reversal column after converting to a bull market. The entry, therefore, is on the three-box reversal, not the breakout above the Triple Top pattern.

The theoretical long opportunity is a buy stop order at the three-box reversal, presently at $0.88. The stop loss is a four-box stop, and the profit target is near the most recent dominant trend line at $1.14. If XRP price moves lower, the entry and stop-loss follow in tandem.

XRP/USD $0/02/3-box Reversal Point and Figure Chart

Invalidation of this long opportunity would only occur if the current O-column returned to bear market conditions – which would occur if it moved to $0.62.


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.

Recommended content

Recommended Content

Editors’ Picks

Ethereum ETF issuers file updated drafts, ETH staking still a possibility

Ethereum ETF issuers file updated drafts, ETH staking still a possibility

Ethereum (ETH) is down 1% on Wednesday as issuers began filing their final spot ETH ETF S-1 drafts with the Securities & Exchange Commission (SEC) in anticipation of a launch on July 23. Meanwhile, SEC commissioner Hester Peirce also said the regulator may reconsider its position on ETH staking within the ETFs.

More Ethereum News

Could Vitalik Buterin's argument affect support for pro-crypto political candidates?

Could Vitalik Buterin's argument affect support for pro-crypto political candidates?

Vitalik Buterin released a post arguing that politicians who claim to be crypto-friendly now may not support it in the future. Buterin highlighted many key factors that crypto represents beyond trading tokens. Intentions of pro-crypto politicians are becoming the subject of debate following Buterin's post.

More Cryptocurrencies News

Dogecoin provides opportunity for investors to ride potential 40% rally

Dogecoin provides opportunity for investors to ride potential 40% rally

DOGE has maintained price patterns similar to BTC, ETH, and SOL. The popularity of other newer meme coins may be drawing attention away from DOGE. DOGE on-chain metrics and technical indicators suggest a rally may be on the horizon.

More Dogecoin News

AI tokens rally following Grayscale's Decentralized AI Fund launch

AI tokens rally following Grayscale's Decentralized AI Fund launch

Grayscale launched its Decentralized AI Fund on Wednesday, allowing investors to gain exposure to the price of AI-focused cryptocurrencies. Following the announcement, the general market cap of AI tokens rose by nearly 4%.

More Cryptocurrencies News

Bitcoin: Investors wonder if BTC troubles are behind

Bitcoin: Investors wonder if BTC troubles are behind

Bitcoin (BTC) stabilized around the $57,000 mark this week, while the German Government persists in transferring Bitcoin to exchanges. Concurrently, US spot Bitcoin ETFs have recorded inflows.

Read full analysis