The central theses
- Bitcoin is above the 100-day moving average while whales are on sale.
- Ethereum presented a sell signal shortly after reaching a new all-time high.
- Ripple’s legal troubles in the US continue to drive up the price of XRP.
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Bitcoin, Ethereum and XRP faced a bearish market this week. And while some investors bought the decline last weekend, prices continue to fall without any significant support.
Bitcoin holds over thin support
Investors are trying to catch a falling knife. BTC long positions valued at more than $ 1.25 billion have been placed liquidated in the last 24 hours across the board.
Despite the blowout, Bitcoin’s decline shows no signs of stopping.
To lose The 50-day moving average as support on April 18th for the first time in seven months marked a turning point for Bitcoin’s uptrend. Since then, the flagship cryptocurrency has fallen another 15.30% and is trying to stay above the 100-day moving average at the time of writing.
Heightened downward pressure on the spot markets could be catastrophic as the next critical demand wall is represented by the 200-day moving average of $ 35,000.
Bitcoin’s supply distribution chart gives credibility to the pessimistic outlook. The number of addresses with 1,000 to 10,000 BTC has decreased by 0.37% in the last 48 hours. In such a short time around eight whales have left the network.
The recent decline in the number of major investors behind Bitcoin may seem insignificant at first glance. When you consider these whales hold anywhere from $ 50 million to $ 500 million in BTC, the sudden surge in selling pressure can lead to millions of dollars.
Despite the gloomy scenario, the MVRV (Market Value to Realized Value) suggests that Bitcoin has fallen into the “Opportunity Zone”. This fundamental index measures the average profit or loss of addresses that have purchased BTC tokens in the past month.
Any time the 30-day MVRV moves below 0% it tends to be followed by a bullish impulse as most of the tokens in circulation are lost. The lower the MVRV ratio, the higher the subsequent buying pressure.
The 30-day MVRV rate is now -13.93%, indicating that Bitcoin is currently undervalued. The last time this on-chain metric hit such a low level was in mid-March 2020 afterwards Black ThursdayThis leads to a full price recovery.
As long as the 100-day moving average persists, Bitcoin could have a chance to bounce back. However, the pessimistic scenario would only be invalid if BTC regained the 50-day moving average of $ 57,000 as support.
Ethereum flashes sell signal
Ethereum made headlines after that surging recently hit a new all-time high of $ 2,650. The bullish impulse appears to have been triggered by a significant increase in the number of whales on the network. Between April 17 and 22, around 24 addresses with 10,000 to 100,000 ETH were created.
The milestone was reached with panic selling among investors after CNBC released a report US President Joe Biden plans to increase capital gains tax to 39.60% for Americans earning more than $ 1 million.
Due to the sudden increase in downward pressure, the market value of Ethereum fell by more than 20% and lost 540 points within a few hours. The sequential indicator Tom DeMark (TD) now predicts that Ether is ready to retrace further.
This technical index recently presented a sell-signal in the form of a green nine candlestick on the 3-day chart of ETH. The bearish pattern assumes that ether will be required to retracement for one to four three-day candlesticks before resuming the uptrend.
A look at Ethereum’s 3-day chart shows that the TD setup was incredibly accurate to anticipate local peaks in the trend of this altcoin. The three sell signals that this indicator has presented since August 2020 have all been validated, resulting in significant retracements.
IntoTheBlock’s GIOM (Global In / Out of the Money) model estimates that $ 1,900 is playing a crucial role in the Ethereum trend. Based on transaction history, this is the biggest barrier of demand under this altcoin.
So far, almost 2.30 million addresses had bought around 17.80 million ETH here. This area could absorb some of the selling pressure and prevent Ethereum from falling any further.
Breaking this support barrier, however, could be disastrous for those betting on the upside. The GIOM cohorts show that the next significant wall of demand, fueling Ether’s uptrend, is around $ 1,600.
Given the unpredictability of the cryptocurrency market, the optimistic outlook cannot be out of question.
The GIOM cohort model shows that there is only one major supply barrier before Ethereum. Around 970,000 addresses hold 4.70 million ETH at $ 2,400.
A 3-day candlestick near this resistance level could invalidate the bearish outlook and lead to further gains.
XRP due to Ripple’s legal uncertainty
According to Judge Sarah Netburn, market participants seem to have included FOMO-in XRP refused the US Securities and Exchange Commission (SEC) has access to the banking records of Ripple’s executives.
The massive surge in buy orders behind this token increased its market value by nearly 240% in ten days, from a low of $ 0.58 to a three-year high of $ 1.96.
From a technical point of view, XRP is escaped an inverse head and shoulder pattern that had developed on its weekly chart since mid-June 2018. After moving past the cutout of the pattern at $ 0.60 on April 4, the fourth largest cryptocurrency went ballistic.
Now, XRP appears to be in a no-trade zone between the Fibonacci retracement levels of 78.6% and 61.8%. Another spike in buying pressure, which allows this altcoin to close above the overhead resistance at $ 1.60, could push it up another 100% towards the all-time high of $ 3.30 in January 2018.
This target is determined by measuring the height between the head and the cutout of the pattern and adding that distance up from the breakout point.
Despite the optimism in the XRP community, Ripple is not yet out of its legal battle with the SEC.
The finance watchman recently accused the distributed ledger start the harassment. It was alleged that the company requested more documents than required by law in order to “ignore the restrictions of [the court order] and embed the SEC in an unspecified discovery controversy and … review documents. “
Until Ripple’s legal issues are resolved, investors will need to keep an eye on the 61.8% Fibonacci retracement level at $ 0.90. Cutting through this level of support could lead to a retest of the inverse head and shoulders at $ 0.60.
Disclosure: At the time of writing, this author owned Bitcoin and Ethereum.
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