As cryptocurrencies rise, mistrust heats up

  • Bitcoin price is consolidating after tagging $23,000.
  • Ethereum is moving along with BTC and is looking at the $2000 level.
  • XRP price rises 8% per day.

The cryptocurrency market continues to consolidate after the unexpected rally seen in January. While many investors remain skeptical of the cryptocurrency’s potential, technical analysis sheds light on previous bull run scenarios that align with the current one.

Bitcoin price may have more fuel in the tank

Bitcoin price entered the $23,000 price zone over the weekend and has since bounced back under a profit-taking consolidation. As the market cools, traders must make another decision. Will they increase their positions, or is it time to end the bullish rally?

Bitcoin price is currently trading at $22,837, which is 2% below the new monthly high of $23,371.80. The Relative Strength Index (RSI), which is used to measure trend potential by evaluating previous swing points, shows the one-month gap between the new monthly high and the previous one, which occurred on January 15 when bitcoin broke above $21,000.

Divergence is a signal that the trend is overextended, which can be a tempting signal for bears to take advantage of. However, traders should be cautious as the downside volatility is in extreme territory. Bitcoin is notorious for weeks of overbought territory trending higher, while the RSI is reaching lower levels.

For example, after BTC’s first encounter with the $40,000 price zone in January 2021, Bitcoin price reached 80 on the RSI. Bitcoin diverged for several weeks as it climbed to $60,000 by April 2021. Thus, it is important for traders to review the history of BTC before relying on classic technical analysis concepts to negate the potential of an uptrend.

Bulls would not be wrong to enter the market through a pullback that may be on the horizon. A dip can be considered a buying opportunity. Bullish targets are $30,000 and potentially $35,000 liquidity levels as long as the RSI can stay above 40 between any future sell-offs.

BTC/USDT 1 day chart

Invalidation of the uptrend currently depends on a breach of the previous swing at $18,887. This would nullify the impulsive structure and potentially create a sharper pullback towards the 2020 low of $15,476. If the bears succeed, the BTC price will drop by 30%.

Ethereum price is cooling down

Ethereum price is undergoing account consolidation after marking the $1,600 zone at the end of last week. Like Bitcoin, the RSI is overbought and shows a bearish gap between the highs of $1,675 and $1,566.

Still, there is significant liquidity to accumulate, as November’s monthly high of $1,680 was missed during the previous rally. With the price consolidating 2% below the liquidity level, it is hard to believe that the market makers will push the ETH price this close to the bakery without eating the pie.

Ethereum price is currently trading at $1636. Traders should expect a bullish resistance to appear near the $1,700 psychological price zone in the coming hours. Finally, if ETH can break through the $1,700 barrier, then $2,000 could become a tangible reality in the coming days.


ETH/USDT 1 day chart

Invalidation of the uptrend depends on the reversal point at the unlabeled $1,349. If the level is breached, the ETH price may fall further towards the $1,100 barrier, resulting in a 30% drop from the current market price.

The price of XRP has risen

The price of XRP broke away from the other two cryptocurrencies (BTC and ETH) as the bulls rallied 8% on the day. On January 23, the digital remittance token hit new highs, marking old liquidity levels near the $0.42 zone, as Bitcoin and Ethereum battled new price swings.

The price of XRP is currently trading at $0.421 as the gain follows a rally. Another key difference between Ripple and the other two currencies is that the Relative Strength Index does not move into overbought territory on a daily time frame. Despite a 40% gain since January 1st at $0.30, the RSI remains subdued below the 70 level. This suggests that XRP’s upward move may be part of a larger correction within the overall downtrend. As long as the RSI remains below 70, caution is warranted.


XRP/USDT 1 day chart

Previous forecasts have argued that XRP will rise in the short term, ideally targeting the $0.427 level tag on Monday and potentially the $0.44 liquidity zone. The second target is 5% away from XRP’s current price, and if the bears break the 8-day exponential moving average at $0.398, the uptrend may be invalidated.

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