- Bitcoin’s price remains around $82,700 on Wednesday after a 5.52% recovery the day before.
- Ethereum’s price is stabilizing near its weekly support level of $1,900; a decisive close beneath this could indicate further decline.
- XRP has established support at its daily level of $1.96, hinting at a potential recovery ahead.
On Wednesday, Bitcoin (BTC) is trading around $82,700 following a 5.52% rebound the previous day. While Ethereum (ETH) exhibits signs of weakness, Ripple (XRP) shows potential for recovery as these cryptocurrencies anticipate volatility surrounding the US Consumer Price Index (CPI) data release on Wednesday.
Bitcoin shows signs of recovery as its RSI indicator rebounds from oversold territory
Bitcoin’s price fell below its 200-day EMA at $85,664 on Sunday, experiencing a decline of 9.14% by the following day. However, BTC retraced, finding support near the $78,258 mark, and rebounded by 5.52% on Tuesday. As of Wednesday, it is trading approximately at $82,700.
Should BTC continue to decline and close below the $78,258 level (the low from February 28), it may extend its decline to retest its next support at $73,072.
The Relative Strength Index (RSI) reads 40 on the daily chart, trending upwards after bouncing off from 30 on Monday, signaling diminishing bearish momentum and a possible reversal from oversold conditions. Nevertheless, the RSI must surpass the neutral level of 50 to ensure the sustainability of the recovery rally.
BTC/USDT daily chart
If bullish momentum strengthens, BTC could further extend its recovery towards $85,000.
Weakness in Ethereum price momentum indicator
Ethereum’s price fell by 7.69% on Monday but managed to recover by 3.13% the following day, closing above the weekly support at $1,905. As of Wednesday, it is trading around this weekly support level.
If ETH continues to slide and closes below $1,905, it might undergo further correction, with the next support level at $1,700.
The RSI on the daily chart shows a reading of 32, trending downwards towards the oversold level of 30, which indicates significant bearish momentum.
ETH/USDT daily chart
Conversely, if ETH manages to recover, it could push towards its next daily resistance at $2,359.
Ripple’s recovery potential if $1.96 support holds
Ripple tested its daily support at $1.96 on Tuesday and experienced a 7.40% recovery. At the time of writing on Wednesday, it continues to climb, trading at approximately $2.20.
If XRP’s recovery continues, it could reach and test its next resistance level at $2.72.
The RSI on the daily chart indicates a reading of 44, moving upwards towards the neutral level of 50, suggesting waning bearish momentum. However, for the recovery rally to remain valid, the RSI needs to surpass the neutral level of 50.
XRP/USDT daily chart
Nonetheless, if XRP encounters a correction and closes below the daily support of $1.96, it could extend to test its February 3 low of $1.77.
Bitcoin, altcoins, stablecoins FAQs
Bitcoin is the leading cryptocurrency by market capitalization, functioning as a decentralized virtual currency. It operates independently of any central authority, eliminating the need for intermediaries in financial transactions.
Altcoins refer to any cryptocurrency other than Bitcoin. Some maintain that Ethereum should not be classified as an altcoin because it, along with Bitcoin, serves as a foundation for forking. Litecoin is commonly considered the first altcoin, having forked from the Bitcoin protocol and thus offering enhancements to it.
Stablecoins are cryptocurrencies designed to maintain a fixed price, backed by reserves of the asset they represent. They achieve this by pegging their value to a commodity or financial instrument, such as the US Dollar (USD), with supply regulated through an algorithm or market demand. The primary aim of stablecoins is to offer a reliable entry and exit point for investors engaging with the cryptocurrency market while enabling them to store value amidst overall market volatility.
Bitcoin dominance reflects the proportion of Bitcoin’s market capitalization relative to the combined market capitalization of all cryptocurrencies. It indicates investor interest in Bitcoin; typically, higher BTC dominance is seen before and during bull runs when investors prefer relatively stable, high-cap cryptocurrencies like Bitcoin. A decline in BTC dominance usually signals that investors are reallocating funds to altcoins in search of greater returns, often leading to significant altcoin rallies.
