- Bitcoin price nears important support as the fallout from the recent break could see BTC prices drop to $16,020.
- Ethereum’s price continues its descent and is on its way to slipping below $1,000.
- XRP price shows no reason why it should not make new lows for the year.
Bitcoin price, Ethereum and other cryptocurrencies are on the backfoot yet again – their moves accelerated after a panel discussion that was held at Siyntra for the ECB yearly economic forum. During that discussion, with central bank heavy weights Powell, Lagarde and Bailey, Jerome Powell repeated and committed to the Fed going for a controlled recession that will bring some pain to markets. If the uber-dove of the biggest central bank in the world says that their monetary policy will hurt investors, that counts as the mother of all alerts for investors to take their money and run for the hills.
Bitcoin price nears support, with the risk of a catastrophe
Bitcoin (BTC) price is nearing the end point of its descent as price action is just inches away from hitting a historic pivotal level that got marked up at $19,036. The earlier mentioned comments from Powell triggered another leg up in dollar strength, which is overpowering bulls that were trying to continue the soft patch from last week, but got rejected on their attempts when bouncing off the $21,969 short-term level. The return to the mentioned $19,036 is standard and foreseen from a technical point of view, but it could get tricky towards the end of the week.
BTC price could go ballistic should price action slip back below that level. Plenty of bulls will have entered at that level and placed their stops just below $19,000. BTC price could see a repetition of the pattern seen on June 18 and June 19, where the stops from the bulls got triggered, pushing them out of their positions and forcing them to reengage to support price action from not falling any further. The question now is, with the additional comments from Powell preaching a controlled recession, whether bulls and investors will find themselves in the same position again. The potential is for another 16% loss to add to the already dreadful performance from Bitcoin thus far and see it hit a $16,000 rock-bottom level.
BTC/USD daily chart
In a best case, a simple technical bounce off $19,036 could do the trick and see the price bouncing higher towards $21,969 again. A test and possible break above that would open up room to attempt a target at the monthly S1 and short-term pivotal level at $23,878. Because that is a bit of a double cap, expect to see some profit-taking around that area and a short fade to the downside in search of support.
Ethereum price is the most vulnerable one out there
Ethereum (ETH) price could be contrasted with the Queen song from the early ’80s: i.e. ‘We are (not) the Champions’. The price action at the moment instead looks like ‘Another one bites the dust’ as several media outlets have already reported that millions of ETH coins were sold by its founder. The current backdrop in global markets, together with Ethereum’s image getting dented further, could see price action imploding anytime soon, and when that happens, you do not want to be anywhere near it.
ETH price will first seek to complete its cycle and possibly seek refuge at the monthly S2 support, which already provided support on June 18 and 19. As mentioned in the Bitcoin piece, this time, investors may not be there to support that level as Powell will have scared plenty of them away. That means that ETH price action could overshoot the S2 and hit $830 to the downside, triggering a 20% drop.
ETH/USD daily chart
Overcoming the heavy sentiment this week looks quite complex, although a drop in liquidity could do the trick with the summer starting soon. Should buyers stay present over the summer and bears take profit before hitting the beach, a supportive momentum could be there for bulls to drive price action higher as bears go on vacation. Expect a rapid return to $1,243, followed by $1,688, at the base of the old bearish triangle and the 55-day Simple Moving Average (SMA) also being tested.
Did Powell sign XRP’s death sentence?
Ripple (XRP) price nears a turning point level that witnessed a reversal on June 18 and would be expected to trigger a bounce back to $0.3710 in a swing trade setup. The current mood and sentiment in global markets suggest otherwise, however, as bearish pressure is mounting in significant numbers, risking a complete meltdown for XRP price action. Powell’s talk of a controlled recession in Sintra on Wednesday is bringing pain to markets, and there is a risk that if investors listen it will start another cash drain just before the summer.
XRP price doesn’t therefore have a good forecast for the summer as price action could be set to implode if $0.3043 does not hold. The fail-safe system is the monthly S1 that has held around $0.2800 – but if that breaks, a whopping 40% drop down opens up where XRP could tank to $0.1737.
XRP/USD daily chart
The best case scenario for XRP price is for a turnaround to $0.3710, started by a bounce off $0.3043 triggering a turnaround. That would mean a 20% profitable trade in the making in a simple range-trade play, and should see it break above the top side, including the 55-day around $0.3800 where it is placing a cap-formation. Should the rally have more legs, $0.4228 could possibly come into play for an uptrend during the summer.