BTC, ETH, XRP complete pullback, just before the start of the first bull run of 2022

BTC price action is showing clear signs that a bottom is in and a fresh rally is imminent. ETH price has so far rejected any selling pressure by staying above the cloud floor. XRP price is functioning in one of the most important Gann cycles of the year, signaling that a new bull run is imminent.

BTC price is poised to rally and retest $45,000 as resistance

Bitcoin is developing one of the most coveted bullish reversal candles in Japanese candlestick analysis: the Dragonfly Doji. Dragonfly Doji is a candle with little or no body, a small wick at the top and a long wick at the bottom. Candlestick patterns alone are not enough to determine the possibility of a bottom, but a combination of the Dragonfly Doji and current oscillators supports this theory.

The Relative Strength Index (RSI) remains in bear market conditions. Although down significantly over the past 2 weeks, it is relatively unchanged and remains in neutral territory. On the other hand, the Composite Index is slowly rising while prices are falling, often resulting in bullish divergences – a warning that the current downtrend is likely to weaken or end. Finally, the clearest indicator of Bitcoin’s oversold state is represented by the Optex Bands oscillator, which is extremely oversold for the first time since July 2021.

Weekly Ichimoku Kinko Hyo BTC/USD chart | Source: Trade View

The upside potential for BTC could be capped at $45,000-$47,000 in the short-term. Bearish downside risk remains but could be limited as BTC finds immediate support near the 88.2% Fib retracement level at $33,000.

ETH price has significant buy support

ETH has recovered well since it bottomed in the $2,150 area. While the downside risk does remain, the current price action appears to have largely removed that concern. There are many buy orders at the 78.6% Fib retracement level and the cloud bottom ($2,160 and $2,350 respectively).

ETH has to close the current weekly candle where the Chikou range does not move below the real body. To do this, the price must close at or above $2,450. If not, ETH is more likely to see another selloff.

Weekly Ichimoku Kinko Hyo ETH/USD chart | Source: Trade View

If ETH stays above the cloud bottom (Senkou Span B at $2,160), the price can quickly drop back to $4,000. RSI, Composite Index and Optex Bands represent extremely oversold conditions. Combined with the current support area, there is a very high probability that ETH will rise sharply soon. Downside risk may be contained to the USD 2,000 value area.

XRP will soon explode

XRP price action has found strong support near the 50% Fib retracement level at $0.64 and the 161.8% Fib retracement level at $0.6. This support comes as XRP has developed very oversold conditions in the RSI, Composite Index and Optex bands.

Perhaps the most important warning sign that a new bull run is imminent is the 180-day Gann cycle (180 to 198 days) — the second-strongest annual cycle. Gann wrote that the 180-day cycle has a high probability of establishing key support or resistance levels. In addition, he noted that reversals are common in this time cycle.

Weekly Ichimoku Kinko Hyo XRP/USD Chart | Source: Trade View

The bulls should look for a move back to test the $1 price zone if XRP can close above the 50% Fib retracement level at $0.64. Downside pressure remains but is likely to be limited to the 61.8% Fib retracement level and the psychological price barrier of $0.5.

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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