Bitcoin cheers encouraging news from the Fed, rising US inflation expectations but still cautious.
Ethereum risks a drop towards Tuesday’s low on a failure to find acceptance above $1650-1700.
Ripple stuck between key average on the daily chart, awaits a strong catalyst for a range breakout.
After putting up a horrifying show at the start of this week, the crypto bulls seem to have found their feet, as a tide of optimism sweeps the crytpo board on Thursday. Despite the turnaround in the sentiment, markets still remain unnerved amid the recent reflation buzz and not-so-encouraging comments from the world’s richest.
Earlier on, the crypto market sell-off ensued, as investors reassessed the recent record run following the cautious remarks from US Treasury Secretary Janet Yellen, Tesla’s founder Elon Musk and Microsoft co-founder Bill Gates.
However, with the US Federal Reserve (Fed) having published the new preconditions for issuing a digital dollar and rising inflation expectations, the bulls have once again turned hopeful. The Fed’s preconditions hinted that it’s a long way until its central bank digital currency (CBDC) would be launched.
Meanwhile, the US inflation expectations have risen to the highest in nearly a decade, driven by prospects of a large fiscal package, progress on vaccine rollouts and pent-up consumer demand, making the flagship cryptocurrency, Bitcoin, more attractive as a hedge against inflation.
Also, adding to the broader market optimism, Coinbase Global Inc., the biggest S cryptocurrency exchange, has filed to go public, with the first major direct listing to take place on the Nasdaq, the company said in a filing with the US Securities and Exchange Commission on Thursday.
Amid the renewed optimism, let’s take a look if the technical charts also reflect the same for a few of the most dominantly traded cryptocurrencies.
Bitcoin bulls insisting but not out of the wood yet
Attention once again turns towards the $60,000 threshold, as Bitcoin appears to have found some solid support around mid-$45,000. However, the BTC bulls are likely to face an uphill battle northward, as depicted by the four-hour chart.
The given chart shows that the world’s most favourite digital asset has recaptured the bearish 21-simple moving average (SMA) at $50,899, having firmly defended the horizontal 50-SMA at $50,094 over the last two trading sessions.
Although the renewed uptick in BTC/USD ran out of steam way below the $52,000 level, as the price battles $51,000, as of writing. The Relative Strength Index (RSI) edges higher but remains below the midline, suggesting that the selling bias still remains intact.
Therefore, should the critical 50-SMA support gives way, a sharp drop towards this week’s low near $45,500 could be in the offing. The next relevant target for the bears is seen at $42,569, where the slightly bullish 200-SMA is aligned.
Alternatively, a four-hour candlestick closing above the 21-SMA barrier is needed for the recovery momentum to gain traction. The $52,000 round figure would challenge the buyers’ commitments, exposing the horizontal 100-SMA at $52,733.
Acceptance above the latter could see a massive surge towards the record highs of $58,367. The next best bet for the bulls is the $60,000 threshold.
Ethereum: Defending the 200-SMA is critical for the bulls
Ethereum is riding higher on the upbeat tone seen across the crypto complex, eyeing a sustained move above the $1700 hurdle. Its worth noting that the ETH bulls have failed to find a strong foothold above the latter ever since its has attempted recovery from this week’s sell-off to near $1350 levels.
From a technical perspective, sellers continue to lurk at higher levels, as the RSI trades listless below the midline, currently at 45.50. Meanwhile, the bulls need conviction to cross the bearish 21-SMA at $1648. However, only a sustained move above the $1700 level could revive the bullish momentum.
An impending bear cross on the said time frame, with the 50-SMA looking to pierce the 100-SMA from above, also backs the case for looming decline for the No. 2 crypto coin.
Wednesday’s low of $1500 would be on the sellers’ radar, with the next downside target seen at the $1400 level.
On the flip side, powerful resistance awaits at around $1800 level – the confluence of the 1—and 50-SMAs, should the buying pressure accelerate above Wednesday’s high of $1714.
Ripple consolidates this week’s collapse, downside risks loom
The XRP bulls have attempted a tepid bounce on Thursday, snapping a two-day downtrend, although the risks remain skewed to the downside, as the technical indicators continue to favour the bears.
On the daily chart, XRP/USD has formed a doji candlestick, suggesting that the bulls lack a follow though bias after the spot collapsed as low as 0.4397 earlier this week.
The 14-RSI also heads lower below the 50.00 level, indicating that the downside appears more compelling for the Ripple traders.
The immediate move lower could be guarded by the mildly bullish 100-SMA at $0.4293 if the sellers take out the weekly lows.
Further south, the upward-sloping 50-SMA at $0.3992 could come to the rescue of the XRP bulls. If the selling pressure intensifies, the critical horizontal support at 200-SMA of $0.3427 could be challenged.
If the buyers manage to resist above Wednesday’s (weekly) low, the rebound could gather momentum towards the $0.50 psychological magnate.
Strong resistance at the 21-SMA of $0.5162 could be the next significant hurdle for the no.7 coin.
To conclude, a strong catalyst is needed to help confirm a breakout for XRP/USD in either direction. Until then, the range play is likely to continue in the coming days.