- Bitcoin’s price stabilizes around $106,400 on Wednesday, just 3% away from its all-time high of $109,588.
- Ethereum remains strong at the 200-day EMA support near $2,441, signaling potential for recovery.
- XRP hovers around the 50-day EMA at $2.28, maintaining stability despite waning momentum.
Bitcoin’s (BTC) price stabilizes around $106,400 at the time of writing on Wednesday, just 3% away from its record peak. Ethereum (ETH) and Ripple (XRP) remain strong above their key support levels. The cryptocurrency market appears to be in a wait-and-see mode, with traders closely watching if BTC can break into uncharted territory and if ETH and XRP can maintain their respective support zones to fuel potential rebounds.
Bitcoin’s Price Nears All-Time High
Bitcoin’s price broke above its $105,000 resistance level on Sunday and retested, finding support around this level the day before. On Tuesday, it retested this support level and edged higher. At the time of writing on Wednesday, it stabilizes around $106,700.
If $105,000 holds strong, BTC could extend the rally towards the all-time high of $109,588 set on January 20.
The Relative Strength Index (RSI) on the daily chart clocks in at 71, pointing upwards above its overbought level of 70, indicating strong bullish momentum. However, traders should be cautious as chances of a pullback are high due to its overbought condition. The Moving Average Convergence/Divergence (MACD) indicator is coiling, indicating indecision among traders.
However, if BTC faces a pullback and closes below $105,000, it could extend the fall to retest its psychological level at $100,000.
Ethereum Eyes Recovery While Holding Strong Around 200-Day Support
Ethereum’s price has retested and found support around its 200-day Exponential Moving Average (EMA) at around $2,441 since Sunday and has been hovering around this level for the following two days. At the time of writing on Wednesday, it continues to hover around $2,500.
If the 200-day EMA holds strong and gains momentum, ETH could extend the rally to retest its key psychological level at $3,000.
The RSI on the daily chart clocks in at 69, pointing upwards towards its overbought levels of 70, indicating strong bullish momentum. However, caution is warranted due to overbought signals suggesting potential for a pullback. Another possibility is the RSI sustains above its overbought level of 70 and continues its uptrend.
On the flip side, if ETH closes below its 200-day EMA at $2,441, it could extend the fall to retest its key psychological level at $2,000.
XRP Holds Steady Despite Weakened Momentum
XRP’s price bounced after retesting its 50-day EMA at $2.28 on Saturday and rose 3.18% the following day. However, on Monday, it declined and remained above the 50-day EMA level until the next day. At the time of writing on Wednesday, it continues to hover around this level.
If XRP breaks and closes below its 50-day EMA on a daily basis, it could extend the correction towards its next key support at $2.23.
The RSI on the daily chart clocks in at 52, pointing towards its neutral level of 50, indicating fading bullish momentum. If the RSI moves below its neutral level of 50, it would give rise to strong bearish momentum and a steep fall in XRP prices. The MACD indicator also flips into a bearish crossover on the daily chart on Monday, giving sell signals and indicating weakness.
Conversely, if the 50-day EMA holds as support, XRP could trigger a rally to retest its resistance level of $2.72.
Bitcoin, altcoins & stablecoins FAQs
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any person, group, or entity, eliminating the need for third-party involvement during financial transactions.
Altcoins are any cryptocurrency other than Bitcoin, but some also consider Ethereum not to be an altcoin because it is from these two cryptocurrencies that the fork occurs. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any stablecoin is linked to a commodity or financial instrument, such as the US Dollar (USD), and its supply is regulated by an algorithm or demand. The main objective of stablecoins is to provide an entry and exit ramp for investors wishing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value, as cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio between the market capitalization of Bitcoin and the total market capitalization of all cryptocurrencies combined. It provides a clear picture of the interest that Bitcoin arouses among investors. A high BTC dominance usually occurs before and during an upward movement, in which investors turn to investing in relatively stable and high market capitalization cryptocurrencies such as Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in search of higher returns, which usually triggers an explosion of rises in altcoins.
