- Bitcoin price action continues to drop towards the $40,000 value area, but conviction is lacking.
- Ethereum price generates bear trap below bull flag pattern.
- XRP price action finds buyers and rejects further selling pressure.
Bitcoin price has developed one of the most obvious head-and-shoulders patterns on its daily chart, generating many new short positions before confirmation of the pattern is complete. Likewise, Ethereum price has seen many new short positions generated after dropping below its bull flag. XRP price action is playing catchup with BTC and ETH as buyers begin to trickle in.
Bitcoin price prepared for a massive short squeeze
Bitcoin price action has certainly been on the downswing of late. Since last week's open, Bitcoin has dropped more than 20%. Fear is the emotion affecting most retail traders.
However, the drop for Bitcoin has been almost textbook in its positioning and timing. Little follow-through selling occurred as Bitcoin price dropped below the December 10 flash-crash low. A short squeeze setup has developed on the $1,000/3-box reversal Point and Figure chart.
The hypothetical long entry is a buy stop order at the 3-box reversal, currently at $45,000 with a stop loss at $41,000 and a profit target at $60,000. The trade idea represents a 3.75:1 reward/risk setup with an implied profit target of nearly 35% from the entry. A two-box trailing stop would help protect any profit made post entry.
BTC/USD $1,000/3-box Reversal Point and Figure Chart
There is no invalidation point for the hypothetical long entry. If Bitcoin price moves lower, the entry and stop-loss follow in tandem, but the profit target at $60,000 remains the same.
Ethereum price leads short-sellers to the slaughter
Ethereum price, like Bitcoin, has generated conditions where many short sellers have entered into the market convinced of a new bear market. The trap was too sweet for many bears to resist, but those who took the bait will likely feel some immense pressure over the next week.
There is a theoretical long entry for Ethereum on its $100/3-box reversal Point and Figure chart. The long setup is a buy stop order at $3,500, a stop loss at $3,100, and a profit target at $5,500. The theoretical long trade is a 5:1 reward/risk setup with a projected profit target of over 60% from the entry. A three-box trailing stop would help protect any profit generated after hitting the entry.
ETH/USD $1003/box Reversal Point and Figure Chart
As with Bitcoin, there is no invalidation point for Ethereum price within its theoretical long setup. If Ethereum moves lower, the buy stop and stop loss move with the lower price action, but the profit target remains the same.
XRP price anticipates a return to the $1.00 value area
XRP price has found buyers to maintain a level above $0.75. Understandably, many bulls remain on the sidelines. Given the current position XRP is at within the Ichimoku Kinko Hyo system, it's no wonder why buyers are tepid about accumulating.
XRP price action technically fulfilled all requirements for an Ideal Bearish Ichimoku Breakout set up two days ago. Sellers have made several attempts to begin a capitulation move, but passive buyers have halted such movement.
XRP/USDT Daily Ichimoku Chart
Many bulls on the sidelines likely want to wait until the $0.82 level is reached before opening new XRP long positions. $0.82 would put XRP price above the Tenkan-Sen, Senkou Span A, and the 38.2% Fibonacci retracement. Bulls may find an entry with that support structure below as less risky than the wide-open space below $0.75.
More conservative buyers are likely waiting for a break above the top of the Cloud (Senkou Span B) to confirm a move to $1.00.
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

Axiom’s volume surpasses $100M as meme trading platform war escalates on Solana
Axiom meme coin trading volume hit $101 million for the first time, surpassing other platforms on Solana. Axiom accounts for 30% of the ecosystem’s trading users, followed by Photon and Bullx at 24% each.

Bitcoin aiming for $95,000 as Global M2 money supply surges
Bitcoin (BTC) price edges higher and trades slightly above $85,500 at the time of writing on Tuesday after recovering nearly 7% the previous week. The rising Global M2 money supply could be a favorable signal for both Gold and Bitcoin.

Top 3 gainers Brett, Story and Virtuals Protocol sparkle as Bitcoin eyes $90,000
Cryptocurrencies have sustained a buoyant outlook since last week as US President Donald Trump’s tariff war was paused for 90 days, except for China, propping global markets for lifeline relief rallies.

Three altcoins to watch this week: ALGO, MANA and JASMY show bullish signs
Algorand, Decentraland and JasmyCoin hovers around $0.19, $0.27, and $0.015 on Tuesday after a double-digit recovery last week. ALGO, MANA and JASMY approach their key resistance levels; breakout suggests a rally ahead.

Bitcoin Weekly Forecast: Market uncertainty lingers, Trump’s 90-day tariff pause sparks modest recovery
Bitcoin (BTC) price extends recovery to around $82,500 on Friday after dumping to a new year-to-date low of $74,508 to start the week. Market uncertainty remains high, leading to a massive shakeout, with total liquidations hitting $2.18 billion across crypto markets.

The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.