BTC, ETH and XRP indicate an impending pullback
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BTC, ETH and XRP indicate an impending pullback

Posted on by Amelia Pressman

  • Bitcoin price action shows bearish momentum on the RSI indicator, suggesting an impending decline.
  • Ethereum price is facing resistance around the $4,000 level, indicating an impending decline.
  • Ripple price is rejecting the $2.66 resistance level, indicating an impending downturn.

Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) are all facing resistance at their crucial levels, indicating a decline in the coming days.

Bitcoin bulls are showing signs of exhaustion

Bitcoin price hit a new all-time high (ATH) of $104,088 on Thursday. It then fell sharply to an intraday low of $90,500, but recovered to close above $96,900 on the same day. BTC rose 4.3% over the next three days through Sunday. At the time of writing on Monday, the price is trading slightly in the red at around $99,500.

Despite recovering from Thursday’s decline and rising through Sunday, Bitcoin’s Relative Strength Index (RSI) is showing warning signs. The higher high formed on Thursday does not reflect the RSI chart for the same period, indicating the formation of a bearish divergence that often leads to a short-term correction.

If this bearish divergence prevails, traders could expect a small increase towards the recent high at $104,088 (to grab liquidity or lock in long positions) and then fall sharply towards the $90,000 support level. A successful close below this level could extend a further decline towards the next support level at $85,000.

BTC/USDT daily chart

However, if BTC continues its uptrend and closes above $104,088, it could extend the rally towards the new all-time high at $119,510. This level coincides with the 141.4% Fibonacci extension line that runs from the November 4 low of $66,835 to Thursday’s all-time high of $104,088.

Ethereum price is set for a decline as it faces resistance at $4,000

Ethereum price rose 8% last week and retested the $4,000 mark on Friday. However, it faced resistance near this level over the weekend. At the time of writing on Monday, the price is trading in the red at around $3,948.

If the $4,000 resistance continues, ETH could extend the decline and retest its daily support at $3,721.

The RSI on the daily chart is 69, pointing down after rejecting the overbought level of 70, indicating weakness in bullish momentum.

ETH/USDT daily chart

However, if ETH rises and closes above $4,000, it could extend the rally and retest the $4,200 level.

Ripple price is set for a downturn

Ripple price is facing resistance around the $2.66 level on Sunday. At the time of writing on Monday, the price is trading slightly in the red at around $2.47.

If the $2.66 level continues to act as resistance, XRP could extend the decline and retest the psychologically important $2.00 level.

The RSI on the daily chart is at 70, hovering around the overbought level of 70. It is pointing downwards, indicating weakness in the bullish momentum. If the RSI moves out of the overbought territory, it could be a clear sell signal.

XRP/USDT daily chart

On the other hand, if XRP recovers and closes above the $2.66 level, the rally could be extended to retest the psychologically important $3.00 level.

Frequently asked questions about Bitcoin, altcoins and stablecoins

Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency intended to serve as money. This form of payment cannot be controlled by a single person, group or organization, eliminating the need for third-party involvement in financial transactions.

Altcoins are all cryptocurrencies except Bitcoin, but some also consider Ethereum to be a non-altcoin since the fork occurs from these two cryptocurrencies. If this is true, then Litecoin is the first altcoin to emerge from the Bitcoin protocol and is therefore an “improved” version of it.

Stablecoins are cryptocurrencies designed to have a stable price and whose value is backed by a reserve of the asset they represent. To achieve this, a stablecoin’s value 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 entry and exit ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value, as cryptocurrencies are generally 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 investor interest in Bitcoin. High BTC dominance typically occurs before and during a bull run, where investors resort to investing in relatively stable, large-cap cryptocurrencies such as Bitcoin. A decline in BTC dominance usually means investors are shifting their capital and/or profits into altcoins in search of higher returns, which usually triggers an explosion of altcoin rallies.

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