- The market has an easy path to move upwards and set in motion a change of direction.
- To fail now would be to bury the bullish movement for a couple of months.
- XRP and Ethereum are best positioned to break and go.
Yesterday's day can be summed up in the idea of halting the blow received and minimizing the damage. The dominant long-term downward trend imposes its force on short-term trends, preventing any of them from achieving the strength needed to change direction in the medium term.
The positive side of what we are seeing is in the speed with which the main crypto assets have positioned themselves below the resistances that served just two days ago as support. In the short term, the market feels quite confident that the end of the big falls has arrived, in spite of different articles where they forecast a price of $1,000 for Bitcoin or $50 for Ethereum.
The arguments for this increase in confidence are the positive comments about the performance of the Lightning network, apparently faster than standard bank wires and the expectation that continues to generate the launch of Constantinople next February 27. These two upgrades affect the two leaders of the crypto-board, so it is logical that the market moves to take full advantage of the situation.
BTC/USD 240 Minute Chart
The BTC/USD pair is currently trading at the $3,373 price level, after finding support yesterday in the $3.360 price congestion support. The resistance to falls sends a positive message, a positivity that is offset by the lack of strength to travel the $30 that separates Bitcoin from the resistance level lost yesterday.
It is surprising to be talking about these price ranges normally, when just 14 months ago, those $30 were traversed in less than a tenth of the time amid record selling.
Above the current price, the first target level is at $3,400 (price congestion resistance), an opposition that is reinforced by $3,417 with the presence of the EMA50. As a second resistance level at $3,465, we have a price congestion resistance, enhanced by the SMA100 at $3,466. From this level, there is an upward jump to the $3,600 resistance level (price congestion resistance and the SMA200).
Below the current price, the first support level is at $3,360 (price congestion support). The second support level is at $3,310 (price congestion support), very close to the level where the baseline of the medium-term downstream channel passes and which is now at $3,270.
The MACD on the 4-hour chart brings its lines back together after yesterday's opening. If there is no bullish cut, the situation will go into a loop, and you will need another jolt to open the lines again.
The DMI on the 4-hour chart shows how the bears did not insist on their bearish bet after yesterday's morning break. For their part, the bulls maintain an enviable optimism and take any opportunity to increase their activity.
ETH/USD 240 Minute Chart
The ETH/USD is trading at the $105.44 price level, after leaving yesterday at $101.12, piercing for moments the $102 price congestion support. From that level, the rest of the day was modestly bullish, stopping the analysis only after reaching the $105.5 price congestion resistance.
If it wasn't for the slow Sisyphean movement, what happened was a typical cleanup of stops. I have seen it a thousand times in my years trading in the NYSE, albeit at a much faster pace.
Above the current price, the first resistance level for the ETH/USD pair is at $105.5 (price congestion resistance), a level reinforced by the $107 presence of the EMA50. The second resistance level is at $109 (price congestion resistance) and also enhanced although in this case by the SMA100 at $110.1. The third resistance level is at the price level of $115 (price congestion resistance).
Below the current price, the first support level is at $103 (price congestion support), leaving the second support level for the ETH/USD pair at $100 (price congestion support). If you lose the magic support level, the next one is at $97 (price congestion support).
The MACD on the four-hour chart shows an active bullish cross. This cross needs price confirmation to be validated, so a break in resistance could be the beginning of a robust upbeat stretch. Any downward movement is going to be difficult.
The DMI on the 4-hour chart shows a substantial decline in bearish forces, which despite the downturn maintain control of the situation. Curiously, the bulls reacted briefly to the drop yesterday early in the morning but quickly regained their previous levels of activity.
XRP/USD 240 Minute Chart
The XRP/USD is currently trading at $0.292, slightly below the $0.294 resistance level that would allow it to move higher in the short term.
The XRP has a much more conducive structure for consistent upward movement. Above the current price and beyond the price congestion resistance of $0.294, the next resistance is at $0.296 (price congestion resistance). The second resistance level is at $0.30 (price congestion resistance and EMA50). As a third bullish target is the price level of $0.308 (price congestion resistance and SMA100).
Below the current price, the XRP/USD has the first support level at yesterday's low of $0.287 (price congestion support), followed a little lower by the $0.285 (price congestion support). The third level of support is at $0.285, the January low and price congestion support.
The MACD on the 4-hour chart shows a very suitable profile for a short term bullish cross. The typical pattern of "MACD Failure" has been fulfilled, so now we only have to watch the classic development of the model.
The DMI on the 4-hour chart shows bears doubting yesterday's falls after the initial moments. On the other hand, the bulls took advantage of the lower prices to increase their activity.
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.