- Bitcoin price hovers around $87,600 on Wednesday after finding support around $85,000 on the previous day.
- Ethereum price found support around the $2,125 level, suggesting a recovery on the cards.
- XRP is approaching its daily resistance at $2.79; a firm close above this level hints at a further recovery.
Bitcoin (BTC) hovers around $87,600 on Wednesday after finding support around its key level the previous day. Ethereum (ETH) and Ripple (XRP) followed BTC’s footsteps and have retested their key support levels, hinting at a recovery ahead of an upcoming White House Crypto Summit, where officials will explain their full plan for the reserve and what it means for the future of digital money in the US.
Bitcoin price could bounce if the $85,000 support level holds
Bitcoin price faced rejection around the $95,000 level on Sunday and declined 8.54% the next day. However, on Tuesday, BTC dipped below the daily support level at $85,000 but bounces and closes above it. This daily level roughly coincides with the 200-day Exponential Moving Average (EMA) at $85,759, making it a key support zone. At the time of writing on Wednesday, it trades slightly above at around $87,600.
If the $85,000 level holds as support, BTC could extend the recovery to retest its Sunday high of $95,000.
The Relative Strength Index (RSI) reads 41 and points upwards toward its neutral level of 50, indicating mild bearish momentum. The RSI must move above its neutral level for the bullish momentum to be sustained. Such a development would add a tailwind to the recovery rally.
BTC/USDT daily chart
However, if BTC breaks and closes below $85,000, it could extend the decline to retest its next support level at $73,000.
Ethereum is poised for a recovery if the $2,125 support continues to hold
Ethereum price found support around its $2,125 level on Saturday and rose 13.56%, closing above its daily resistance of $2,359 the next day. However, ETH erased its recent gain on Monday but found support around its $2,125 level the next day. At the time of writing on Wednesday, it hovers around $2,176 level.
If the $2,125 level holds as support and ETH continues its recovery, it could extend the rally to retest its next resistance level at $3,000.
The RSI on the daily chart reads 35 after rejecting around its neutral level of 50 on Sunday, indicating bearish momentum. The RSI must move above its neutral level for the bullish momentum to be sustained. Such a development would add a tailwind to the recovery rally.
ETH/USDT daily chart
On the other hand, if ETH declines and closes below $2,125, it could extend the decline to retest its weekly support level of $1,905.
Ripple price is poised for a recovery as it finds support around its 100-day EMA
Ripple price was rejected around its key psychological level of $3 on Sunday, and it declined 18.79% the next day. However, it found support on Tuesday and bounced off its 100-day EMA at $2.30. At the time of writing, it hovers around $2.45 level.
If the 100-day EMA at $2.30 holds, XRP could extend the recovery to retest its psychological level of $3. A firm close above this level could extend an additional rally to retest its January 16 high of $3.40.
The RSI on the daily chart reads 48 and points flat around its neutral level of 50, indicating indecisiveness among traders. The RSI must move above its neutral level for the recovery to be sustained.
XRP/USDT daily chart
However, if XRP fails to find support at the 100-day EMA and closes below, it could extend the decline to retest its next support level at $1.96.
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.
