- Bitcoin bounces off support at $30,000 as a double-bottom pattern hints breakout back to $40,000.
- Ethereum slumps to $1,045 just days after trading a new all-time high at $1,440.
- Ripple is motionless above $0.26 after a minor recovery from price levels around $0.25.
It was bloodshed in the cryptocurrency market on Thursday and the Asian session on Friday. The majority of crypto assets plummeted from their weekly peaks, cutting short plans to rally to new record highs. Ethereum, for instance, plunged to $1,000, temporarily abandoning the mission to hit new record highs.
Moreover, Bitcoin revisited $30,000 but has managed to avert losses to $25,000 as predicted on Thursday. The rest of the market is still painted red apart from some selected tokens such as Curve Dao, which ignored the bearish wave to post double-digit gains.
Bitcoin on the verge of a technical upswing to $40,000
The pioneer cryptocurrency has resumed the uptrend from the support at $30,000. It is exchanging hands slightly above $31,000, while bulls work tooth-and-nail to regain control over the price.
The bullish outlook to $40,000 is likely to be validated by the formation of a double-bottom pattern. This pattern is bullish and is created after the price tests a lower level twice.
A double bottom pattern identifies a precise entry point and gives an exact target; in this case, BTC/USD is likely to hit $40,000.
Similarly, the Relative Strength Index is rebounding from the oversold area. Further action toward the midline will signal a growing bullish grip. Closing the day above the 200 SMA on the 4-hour chart will add credence to the anticipated upswing.
BTC/USD 4-hour chart
It is worth noting that the spike in price to $40,000 will fail to occur if the 200 SMA hurdle remains unshaken. On the downside, losses under $30,000 could validate the bearish call to $25,000.
Ethereum must break the $1,200 barrier to save upswing to record highs
Ethereum had curved a path to new all-time highs earlier this week by rising to $1,440. Most analysts believed that Ether would rest above $1,800 before the launch of CME ETH futures on February 8. Besides, a Fundstrat analyst recently predicted that Ethereum is heading to $10,500 by the end of 2021.
While the rally was cut short by the declines touching $1,045, Ethereum seems to be regaining momentum. At the time of writing, the price is trading at $1,164. On the upside, resistance is expected at the 100 SMA ($1,200). Ether must overcome this hurdle to pave the way for further gains and reinstate the mission to $1,800.
ETH/USD 4-hour chart
On the other hand, ETH/USD is not out of the woods yet. In case the seller congestion at $1,200 stays put, a breakdown would come into the picture and perhaps push Ethereum to the short-term support at $1,100. If push comes to shove and sellers start panic selling, we can expect Ethereum to extend the losses to $900.
Ripple’s recovery is an uphill battle
Ripple swung out of consolidation as predicted but ended up in a breakdown that saw it refresh levels under $0.25. A reversal came into play, but its upside is capped under $0.27.
Meanwhile, XRP is trading at 0.265 amid more sideways trading action. Recovery back to $0.3 is unlikely to come easy, especially with the resistance at the 50 SMA, the 100 SMA and the 200 SMA on the 4-hour chart.
The leveling RSI has reinforced the prevailing sideways trading. However, if XRP breaks above $0.27, gains to $0.3 may begin to materialize.
XRP/USD 4-hour chart
Support at $0.25 remains key to XRP’s recovery mission and must be defended at all costs. If broken, declines will target $0.2 and $0.17 (December low), respectively.