The cryptocurrency market is showing signs of a short-term correction as Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) prices edge slightly down after recent highs. Technical indicators and price actions for these major cryptocurrencies suggest potential pullbacks in the near future.
Bitcoin Bulls Show Signs of Exhaustion
Bitcoin hit a new all-time high of $108,353 on Tuesday, marking a 3.32% increase from the previous week. However, during the Asian session on Wednesday, BTC’s price edged slightly down to around $105,019. This decline suggests that Bitcoin bulls might be losing steam.
If Bitcoin faces a correction and closes below the $101,109 support level, it could trigger a more significant decline, potentially retesting the next support level at $90,000. The Relative Strength Index (RSI) on the daily chart reads 66, having rejected the overbought level of 70 on Tuesday. The downward-pointing RSI indicates a decrease in bullish momentum. If it continues to edge down and closes below its neutral level of 50, Bitcoin’s price could fall sharply.
Conversely, if Bitcoin manages to sustain its upward trend and closes above its all-time high of $108,353, it might extend the rally to test a new high of $119,510. This level aligns with the 141.4% Fibonacci extension drawn from the November 4 low of $66,835 to the December 5 high of $104,088.
Ethereum Faces Rejection at $4,000
Ethereum encountered resistance at the $4,000 level on Monday, leading to a 2.34% decline the next day. As of Wednesday, ETH continues to trade down around $3,858. If the $4,000 resistance persists, Ethereum could extend its pullback, potentially retesting its weekly support at $3,522.
The RSI on the daily chart reads 57 and is pointing downwards toward its neutral level of 50, indicating early signs of bearish momentum. Should the RSI close below 50 on a daily basis, Ethereum’s price could experience a sharp fall.
However, if Ethereum breaks and closes above the $4,000 resistance, it could extend its rally by 12%, potentially retesting its December 9, 2021, high of $4,488.
Ripple Shows Signs of Indecisiveness
Ripple’s price found support around the $1.96 level on December 10 and rallied 16% until Tuesday, facing slight rejection around the $2.66 level. As of Wednesday, XRP trades slightly down around $2.53. If the $2.66 level continues to act as resistance, XRP could extend its decline, potentially retesting the next support level at $2.21.
The RSI on the daily chart reads 65 after rejecting the overbought level of 70, suggesting indecisiveness among traders. If XRP continues to rise and closes above $2.66, it could extend the rally to retest the psychologically important level of $3.00.
Conclusion
Bitcoin, Ethereum, and Ripple are all showing signs of potential short-term corrections following recent highs. Traders should closely monitor key support and resistance levels, as well as the RSI indicators, to anticipate possible price movements. While there is potential for continued rallies, the current technical indicators suggest a cautious approach in the near term.
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