The cryptocurrency market experienced significant declines as Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) all faced major pullbacks following prolonged periods of consolidation. As of Wednesday, Bitcoin hovers around the $88,500 mark after reaching a low of $86,050 earlier in the week, with Ethereum and Ripple closely following suit, losing 11% and 12%, respectively.
Bitcoin Bears Eye $85,000 Support Level
Bitcoin broke out of its lengthy consolidation phase this week, slipping below its $94,000 support level and closing at $91,552 after a 4.89% drop on Monday. The price continued its downtrend with a further 3.14% decline on Tuesday, reaching a low of $86,050. At the time of writing, BTC is hovering around the $88,500 level.
If this correction continues, Bitcoin could extend its decline and test the next support level at $85,000. The Relative Strength Index (RSI) on the daily chart currently reads 29, indicating that Bitcoin is approaching oversold conditions, which suggests that a potential reversal or bounce may be near. However, caution is advised as the RSI could remain below the oversold threshold and prolong the downtrend.
In a more bullish scenario, if Bitcoin manages to recover, it may attempt a retest of the psychological $100,000 level.
Ethereum Faces Further Downward Pressure Below $2,359
Ethereum’s price experienced a sharp 11% decline on Monday, and its downtrend continued into Tuesday, testing its daily support at $2,359. At the time of writing, Ethereum sits around $2,486.
Should ETH close below the $2,359 mark, it is likely to extend its decline toward its February 3 low of $2,125. The daily RSI is currently at 36, having rejected the neutral 50 level on Sunday, signaling ongoing bearish momentum.
In the event of a recovery, Ethereum could aim to test its Monday high of $2,839. However, the downside risk remains significant if the bearish trend continues.
Ripple Faces Resistance at $2.72, RSI Shows Weak Momentum
Ripple saw a near 12% drop on Monday, reaching a daily low of $2.06. At the time of writing, XRP trades around $2.29.
If the $2.72 resistance level holds, Ripple could face additional downward pressure, potentially testing its next support level at $1.96. The RSI on the daily chart stands at 36, indicating weak momentum and reinforcing the bearish outlook.
Conclusion
The overall market sentiment for Bitcoin, Ethereum, and Ripple remains cautious amid bearish momentum. Bitcoin faces a crucial test at the $85,000 support level, while Ethereum and Ripple are vulnerable to further declines if key support levels fail to hold. However, all three cryptocurrencies could experience a rebound if the market finds support or if oversold conditions trigger a reversal. Traders should monitor these key levels for potential signs of recovery or continued bearish movement.
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