Bitcoin price has fallen significantly this week, down more than 18% and back to non-trading levels since August 2021. At the same time, ETH is making a fresh 3-month low and threatening a return to the $2,300 region. XRP is expected to return to the $0.65 support area before rallying again.
Despite the catastrophic drop, bitcoin price is approaching one of the weekly chart’s strongest support levels: the bottom of the Ichimoku Cloud (Senkou Span B) pattern. In the Ichimoku-Kinko-Hyo system, the strongest support and resistance is Senkou Span B.
Senkou Span B is in the $37,500-$38,000 zone and BTC is testing it. Most likely, the price touched the support and created a buy zone for bitcoin. There is frequent bullish divergence between the candlestick chart and the Composite Index underlying the near-term support at $38,000. Additionally, sitting just above the extremely oversold level, the Optex Bands oscillator continues to show that support has been found.
Weekly Ichimoku Kinko Hyo BTC/USD chart | Source: Trade View
If Bitcoin closes when the Chikou range is below real body and closes below the cloud, a much more intense sell-off is possible that will propel the price into the $20,000 region very quickly. Upside could be capped at $49,000.
ETH is now down below the cloud top (Senkou Span A) at $2,500. However, the price must reach the Senkou Span A before starting a new rally. From an oscillators (oscillators) perspective, there are many reasons why ETH is about to rally.
The Relative Strength Index remains in a bull market and is currently testing its last oversold condition at 40 (which hovers just above 42). Likewise, the Optex Bands indicator turns into extremely oversold conditions. Finally, the most important oscillator condition is the position of the Composite Index. There is a dramatic, almost imperceptible, hidden bullish divergence between the candlestick chart and the Composite Index.
It is important to note the historical significance of these oscillator values. The last time the Optex Bands Index was close to its current range was in December 2019. The Relative Strength Index is trading at similar levels in March 2020. Finally, the Composite Index hit a low not seen since September 2019.
ETH price near strong support price combined with RSI near final oversold level, Optex bands in very oversold state and bullish divergence hidden in Composite index could trigger a higher move for ETH anytime.
Weekly Ichimoku Kinko Hyo ETH/USD chart | Source: Trade View
ETH has the greatest downside risk as the price trades in the $2,300 region at the end of the cloud (Senkou Span B). A weekly close below this zone would trigger an ideal bearish Ichimoku breakout and cause a quick drop to $1,500. Upside may be limited in the $4,000 region.
XRP’s price action has definitely been one of the most boring, bearish and disappointing in the last year. U.S. customers are essentially blocked from buying XRP due to a legal battle with the U.S. Securities and Exchange Commission that has put Ripple in a position of fear, uncertainty, and doubt. Any weakness in the overall market will likely affect XRP more than other altcoins.
However, it is not without hope for XRP. The price is fast approaching one of the strongest support areas on the chart. The 50% Fibonacci retracement level at $0.65 and the volume control point at $0.61 represent the key area of support on the XRP chart. As such, traders should look out for significant volatility and jagged price action (even an unusual drop into the area of $0.50) will wait as they approach $0.61 – but in the end support will still hold.
Ichimoku Kinko Hyo XRP/USDT weekly chart | Source: Trade View
A weekly close below $0.6 would place XRP in an ideal bearish Ichimoku breakout setup and invalidate any remaining bullish outlook.
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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