- Bitcoin price hovers around $97,500 on Wednesday after declining 4.47% since Monday.
- Ethereum price closes below the daily support level of $3,721, indicating a continuation of ongoing pullback.
- Ripple price finds support around $1.96; a firm close below this would indicate a decline ahead.
Bitcoin (BTC) price hovers around $97,500 on Wednesday after declining 4.47% so far this week. Ethereum (ETH) followed BTC’s lead and closed below the key support level, suggesting a continuation of the pullback ahead. Ripple (XRP) bounced off its crucial support level; a firm close below this would indicate a decline ahead.
Moreover, on Tuesday, the crypto market faced mixed sentiments after crypto community members spoke about the potential of Google’s new quantum chip, Willow’s ability to crack blockchain networks and render the security of public key cryptography useless.
Bitcoin bulls show signs of weakness
Bitcoin price declined 4.47% so far this week until Tuesday. At the time of writing on Wednesday, it hovers around $97,500.
Traders should be cautious as the Relative Strength Index on the daily chart shows signs of weakness. The recent uptrend in Bitcoin price since mid-November reflects a falling RSI level during the same period, indicating diminishing bullish strength. Moreover, if the RSI daily closes below the neutral level of 50, it generally indicates bearish momentum is gaining traction.
If BTC continues its decline and closes below the $90,000 support level, it could extend losses toward the next support level of $85,000.
BTC/USDT daily chart
Conversely, if BTC continues its recovery and closes above $104,088, it could extend the rally toward a new all-time high of $119,510. This level aligns with the 141.4% Fibonacci extension line drawn from the November 4 low of $66,835 to Thursday’s all-time high of $104,088.
Ethereum price set for a decline as it closes below daily support
Ethereum price faced rejection from the $4,000 level on Friday and declined 9.4% until Tuesday, closing below its daily support level of $3,721. At the time of writing on Wednesday, it recovers slightly, trading at around $3,660.
If ETH continues its decline, it could extend the fall to retest its weekly support level at $3,454. A successful close below this level could extend an additional decline to retest its psychological importance level of $3,000.
The RSI on the daily chart reads 55 and points downwards after rejecting the overbought level of 70, suggesting weakness in bullish momentum. The Moving Average Convergence Divergence (MACD) indicator also supports the price decline. The MACD line shows a bearish crossover on Tuesday, indicating sell signals.
ETH/USDT daily chart
However, if ETH rallies and closes above $4,000, it could extend the rally to retest the $4,200 level.
Ripple could face a downturn if it closes below $1.96 support level
Ripple price faced resistance around the $2.66 level on Sunday and declined more than 15% the next day. On Tuesday, it rebounds 7% after retesting its $1.96 support level. At the time of writing on Wednesday, it hovers around $2.33.
If XRP declines and closes below the $1.96 level, it could extend the decline to retest its weekly support level at 1.40.
The RSI on the daily chart reads 63 and points downwards after rejecting the overbought level of 70, suggesting weakness in bullish momentum. Additionally, the MACD indicator also supports the Ripple price decline. The MACD line shows a bearish crossover on Tuesday, indicating sell signals.
XRP/USDT daily chart
However, if XRP rallies and closes above the $2.66 level, it could extend the rally to retest the psychologically important level of $3.00.
Bitcoin, altcoins, stablecoins FAQs
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin’s market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
