At this time, Bitcoin is at a level where things might turn out ugly. Concerns regarding the sustainability of the move are followed by the fact that despite breaking above a local ascending trendline, trading volume is not confirming this breakout. The bullish breakout is undercut by the declining volume trend, which also raises the possibility of a fakeout. The upper boundary of the ascending triangle was formed by a diagonal resistance line, which Bitcoin has been able to break above in recent days.
Still, the breakout has been accompanied by steadily declining trading activity rather than new buying interest. When volume is weak, these moves are prone to reversals and are frequently short-lived. The inability of Bitcoin to sustain momentum in spite of breaking the technical setup is the bulls’ biggest worry right now. The asset may soon lose its hold on the recently claimed levels if it is unable to gain strength above the $85,000 to $86,000 range.
In these circumstances, there is a good chance that the psychological threshold of $80,000 will return. The fact that Bitcoin continues to trade below the 100 and 200 EMAs on the daily chart escalates the technical issues. The 200 EMA is currently just below at $90,000, while the 100 EMA is currently at about $90,200.
There does not seem to be much more upside potential until Bitcoin overcomes these resistance levels with support from higher volume. Bitcoin traders should keep a careful eye on price action in the short term around the 100 EMA and look for indications of conviction in volume behavior. If volume does not drastically improve, the current breakout could be completely invalidated, which could force Bitcoin to retest lower support levels.
XRP gets squeezed
The classic squeeze situation that XRP is currently going through between its 50-day and 100-day exponential moving averages indicates that the asset is about to make a significant move. With the 50 EMA below and the 100 EMA above, the asset is consolidating within a narrowing range, as can be seen on the chart. Before a breakout or breakdown, traders usually watch this technical squeeze for confirmation. Price consolidation is possible just above $2.30 as the 26 EMA seems to be serving as a short-term base of support halting additional declines.
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This level might act as the starting point for a bounce back toward the crucial resistance level around $2.70, which has traditionally acted as a roadblock to upward movement. If this barrier is successfully crossed, the way to a longer rally may become clear. But there is still a crucial disclaimer: volume.
The volume profile of XRP keeps declining, which indicates that traders are becoming less active and unsure of what to do. A major move is frequently preceded by declining volume, but it can also indicate that there is not enough momentum to support any breakout attempt. The current climate implies that traders are holding off on reentering the market with conviction until they receive a clear signal.
XRP might return to the upper limit of the descending trendline structure if it can use the 26 EMA’s support and gain enough strength to break above the 100 EMA. A reversal and retest of the 50 EMA support could result from failing to do so. The $2.70 mark is still a significant technical and psychological obstacle. Bullish strength would be confirmed if there were a breakout above it with increasing volume. As of right now, XRP is still stuck in a squeeze zone that may determine its course in the coming weeks.
Ethereum coming back
Following weeks of intense bearish pressure, Ethereum has finally recovered above the psychologically significant $2,000 threshold, suggesting a possible turnaround. Currently trading close to $2,017, the asset is gradually rebounding from a sharp correction that characterized a large portion of its price action in recent weeks. Although Ethereum’s fundamentals have not changed much, the asset’s market dynamics have. It is possible to attribute the recent price rebound to a rebalancing of positions.
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The market had been dominated by short pressure for weeks as investors have tended to have pessimistic outlooks. As buying interest grew and short sellers scrambled to cover their positions, this resulted in an oversold situation for ETH, paving the way for a corrective bounce. The Ethereum technical setup remains cautious despite a modest recovery. With the 50, 100 and 200 EMAs forming a steady downward slope, the asset continues to trade below all significant exponential moving averages.
The overall trend will continue to be bearish until ETH regains at least the 50 EMA, which is located around $2,400. Nevertheless, the recent increase in volume points to a resurgence of accumulation interest in the current price range. Another sign of a possible change in momentum is the RSI indicator, which has recovered from oversold territory.
The current bounce does not, however, imply a sustained trend reversal without additional confirmation from volume expansion and a break above resistance levels, so traders should continue to exercise caution.
