- Bitcoin reacts to a symmetrical triangle pattern formation, with declines eyeing $25,000.
- Ethereum on the verge of a breakdown to $1.200 and $1,100, mainly if ascending parallel channel support breaks.
- Ripple in consolidation but could dive to $0.25 if it closes the day below the 50 SMA.
Joe Biden’s inauguration is behind us without any hitches, although former President Donald Trump skipped the national event. Bitcoin and the rest of the cryptocurrency market remained relatively quiet apart from Wednesday morning dip. A minor drop saw BTC refresh the support at $34,000, allowing Grayscale Investments to top up its holdings by 8,000 BTC.
At the time of writing, the cryptocurrency market is turning bearish fast with selected assets such as Ethereum, Aave and Cosmos sliding by 7%, 10% and 10% in that order. Similarly, Bitcoin appears to be hunting for another bottom (higher) before it makes the great move above $40,000 again.
Bitcoin bearish outlook returns
BTC/USD is in the process of confirming a symmetrical triangle breakdown. The 4-hour chart shows the chart pattern’s formation with converging trendlines that link a series of sequential peaks and troughs.
Generally, the trendlines are supposed to cross at an approximately equal point referred to as the apex. Symmetrical triangle patterns highlight periods of consolidation ahead of either a breakout or a breakdown.
It helps to note that a breakdown occurs from the ascending trendline and identifies the beginning of a downtrend. On the other hand, a breakout happens at the descending trendline and signifies the start of a bullish trend.
Symmetrical triangles have precise price targets for the breakout or breakdown, mainly measured from the highest point to the pattern’s lowest point. For instance, if the chart’s breakdown confirms, Bitcoin could be on the verge of a downswing to $25,000.
BTC/USD 4-hour chart
Bitcoin has already lost two key support levels, $34,000 and $33,000. The next tentative support is $32,000 and the 200 Simple Moving Average. Other vital levels to keep in mind are $30,000 and $28,000.
Ethereum testing crucial support as declines linger
Ethereum has been caught in a bearish gust of wind sweeping across the cryptocurrency market. The seemingly massive overhead pressure comes barely 48 hours after Ethereum hit a record high at $1,446.
In the meantime, the least resistance path is downwards, especially after Ether lost the ascending channel’s middle boundary support. For now, attention has been turned to defending the channel’s lower edge and the 50 SMA on the 4-hour chart.
If push comes to shove and the bearish leg overshoots the above crucial levels, Ethereum is likely to refresh the 200 SMA at $1,200.
The Moving Average Convergence Divergence, or MACD, adds credence to the pessimistic outlook.
This technical indicator traces the path of a trend and measures its momentum. It has turned bearish at writing with the 12-day exponential moving average crossing under the 26-day exponential moving average. The odds for a bearish impulse have increased significantly.
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ETH/USD 4-hour chart
The optimistic outlook discussed earlier will be viable if Ethereum holds above the 50 SMA. Price action beyond the channel’s middle boundary would call for more buy orders, pulling ETH toward new all-time highs at $1,400.
Ripple consolidation nears breaking point
XRP is trading at $0.284 after losing support at the 100 SMA. Overhead pressure is bound to increase in the near term, especially with the price dancing beneath the Bollinger bands middle boundary.
The Relative Strength Index is sliding under the midline and could validate the downtrend, eyeing $0.25. Realize that as the Bollinger bands squeeze, a breakout or breakdown draws nigh.
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XRP/USD 4-hour chart
The bearish outlook would be thrown out the window if Ripple reclaimed the ground above the confluence established by the 50 SMA, the 100 SMA and the Bollinger band middle boundary. XRP will remain in the woods and susceptible to losses as long as it trades under $0.3.