- Bitcoin price action mixed, solid cases for bear or bulls to take over.
- Ethereum price in a similar conundrum as Bitcoin.
- XRP price presents a buying opportunity before hitting $0.75
Bitcoin price is at dire risk of initiating a very bearish breakout if it fails to stay above $37,500. Likewise, Ethereum price action, like Bitcoins, is at an inflection point that will cause pain to either bulls or bears once an established breakout occurs. XRP price has stubbornly defended the $0.60 value area and appears to have succeeded at holding that zone.
Bitcoin price warning of bearish continuation – but bulls are set up for a surprise rally
Bitcoin price is currently trading in a frustrating zone of consolidation. While it remains bullish on a 3-week perspective, the weekly and daily charts remain overwhelmingly bearish but highly oversold. Strong arguments can be made for short sellers to maintain control and bulls to terminate the current trend and reverse it. As a result, two possible trade opportunities are now present.
The first possible trade setup is on the short side of the trade. The short idea is a hypothetical short entry is a sell stop order at $35,000, a stop loss at $38,000, and a profit target at $20,000. Technically, the Vertical Profit Target Method in Point and Figure analysis shows $15,000 as the target, but a considerable amount of resistance would almost certainly prevent a collapse to that price zone in a single trend.
BTC/USD $1,000/3-box Reversal Point and Figure Chart
The short entry idea is based on a Pole Pattern reversal. The rule for this trade setup is that the current X-column can not print another X above 50% of the prior O-column. In other words, if Bitcoin price prints an X at $40,000, the hypothetical short entry is invalidated.
On the long side of the trade, the theoretical long setup is a buy stop order at $38,000, a stop loss at $36,000, and a profit target at $48,500. The trade represents a 5.25:1 reward/risk setup. A two to three-box trailing stop would help protect any implied profit post entry. While the Vertical Profit Target Method identifies $48,500 as the max potential, it is more probable that Bitcoin price will be halted somewhere just below the bear market trendline – somewhere between $43,000 and $45,000.
BTC/USD $500/3-box Reversal Point and Figure Chart
The theoretical long trade setup is invalidated if Bitcoin price drops below $31,000.
Ethereum price presents long and short trade opportunities
Ethereum price is almost identical to Bitcoin, except that ETH is above Senkou Span B on its weekly Ichimoku chart. Ethereum must close its weekly candlestick above $2,350, or it will enter into the weakest position since 2019. However, bulls are positioned to invalidate any bearish continuation. Two trade setups for both sides of the market are now present.
The first theoretical trade for Ethereum price is a buy stop order at $2,550, a stop loss at $2,350, and a profit target at $3,250. The trade setup represents a 3.5:1 reward/risk. A two-box trailing stop would help protect any implied profit made upon the entry triggering. Additionally, expect some resistance around the $3,000 to $3,050 value areas as they close to the bear market trend line (red diagonal line).
ETH/USD $50/3-box Reversal Point and Figure Chart
The long idea is invalidated if Ethereum price prints an O at $2,300.
On the short side of the trade, the hypothetical setup is a short entry at $2,300, a stop loss at $2,700, and a profit target at $1,200. The profit target is a bit of a caveat on this trade setup: it’s not likely to get to the projected zone despite it being within the range of profit projection in Point and Figure analysis.
ETH/USD $100/3-box reversal Point and Figure Chart
The short idea is invalidated if the long entry triggers first.
XRP price holds on to $0.60, readies for a move to $0.75
XRP price has done a fantastic job of staving off any further selling during the week. While it is not yet out of the woods, it is positioned for a bullish reversal candlestick against a strong support zone. The first test that bulls need to pass is achieving a daily candlestick close above the Tenkan-Sen at $0.65.
However, downside risks do remain. Despite the strong support in the $0.60 zone, there remains an absence of convincing bullish continuation. So far, buyers have rejected lower prices but have not stepped in enough to support higher prices. This could be a sign of weakness going into the weekend.
XRP/USD Daily Ichimoku Kinko Hyo Chart
Downside risks for XRP are limited to the $0.50 value area, while the upside potential is limited to the $0.75 level.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
Is Altcoin Season here as Bitcoin reaches a new all-time high?
Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.
Shanghai court confirms legal recognition of crypto ownership
A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.
BTC hits an all-time high above $97,850, inches away from the $100K mark
Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange
Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.
Bitcoin: New high of $100K or correction to $78K?
Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.