Bitcoin price, although slowly rising, is showing a bullish outlook and offering a racing opportunity for altcoins. The evidence is that many altcoins have made gains over the past week. As ETH continues its uptrend, XRP is struggling to hold up.
Bitcoin made a lower low at $44,439 after the Jan. 13 high but was able to make a higher low, keeping the uptrend somewhat intact. As BTC bounces off the 4-hour demand zone, which stretches from $41,843 to $42,707, investors can expect the game-changing cryptocurrency to reach last week’s high of $47,609.
This hurdle is below the 200-day simple moving average (SMA) of $48,590. However, bitcoin’s upside potential appears to be limited to the above levels, at least in the short-term.
BTC/USD 4 hour chart | Source: TradingView
If the price does not bounce off the demand zone between $41,843 and $42,707, it will indicate buyer weakness. This lack of interest could allow the bears to take control and push bitcoin to $41,762. A 4 hour candle closing below would invalidate the bullish thesis.
This development could push bitcoin price lower and retest the $39,870 support.
ETH is also in a similar situation to Bitcoin where the price made a higher low but failed to make a higher high. As long as BTC remains bullish, ETH will follow. As a result, market participants can expect the smart contract token to rally to the 200-day SMA at $3,475.
Clearing this barrier will pave the way for ETH price to return to the daily supply zone, which stretches from $3,675 to $3,846. The upper bound of this hurdle coincides with the 50-day SMA, which suggests that further uptrend is unlikely.
ETH/USD 4 hour chart | Source: TradingView
Regardless of the bullish scenario, ETH price needs to hold above the weekly support at $3,061 to stage any significant uptrend. The loss of this line of defense erases trust and creates distrust among buyers.
However, a 4-hour candle that closes below the demand zone floor at $2,927 will create a lower low, invalidating the bullish thesis.
XRP price is currently fluctuating above the daily demand zone, ranging from $0.693 to $0.753 since the December 4, 2021 crash. One might assume that this barrier is disappearing. However, due to its correlation with BTC, XRP price is likely to surge 12% and retest the 50-day SMA at $0.844.
However, the flagging demand zone could be crushed by near-term downside momentum, so investors should be cautious with remittance tokens.
In some cases, XRP can break the immediate barrier and rally to the 200-day SMA at $0.954.
XRP/USD 1-day chart | Source: TradingView
On the other hand, if XRP closes a daily candle below $0.693, it will form a lower low, debunking the bullish thesis. This development could trigger a breakdown where XRP price could fall back to the $0.604 support level.
Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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