- Bitcoin price stabilizes around $106,400 on Wednesday, just 3% shy of its all-time high at $109,588.
- Ethereum holds strong at the 200-day EMA support near $2,441, signaling potential for recovery.
- XRP hovers around the 50-day EMA at $2.28, maintaining stability despite fading momentum.
Bitcoin (BTC) price stabilizes at around $106,400 at the time of writing on Wednesday, just 3% shy of its record peak. Ethereum (ETH) and Ripple (XRP) hold strong above their key support levels. The crypto market appears to be in a wait-and-see mode, with traders closely watching whether BTC can break into uncharted territory and if ETH and XRP can maintain their respective support zones to fuel potential rebounds.
Bitcoin price inches from its all-time high
Bitcoin price broke above its $105,000 resistance level on Sunday and retested, finding support around this level the previous day. On Tuesday, it again retested this support level and rose slightly. At the time of writing on Wednesday, it stabilizes at around $106,700.
If the $105,000 remains strong, BTC could extend the rally toward the all-time high of $109,588 set on January 20.
The Relative Strength Index (RSI) on the daily chart reads 71, pointing upward above its overbought level of 70, indicating strong bullish momentum. However, traders should be cautious as the chances of a pullback are high due to its overbought condition. The Moving Average Convergence Divergence (MACD) indicator is coiling together, indicating indecisiveness among traders.
BTC/USDT daily chart
However, if BTC faces a pullback and closes below $105,000, it could extend the decline to retest its psychological level at $100,000.
Ethereum eyes a recovery as it holds strong around the 200-day support
Ethereum price has retested and found support around its 200-day Exponential Moving Average (EMA) at around $2,441 since Sunday and hovered around it the next two days. At the time of writing on Wednesday, it continues at around $2,500.
If the 200-day EMA remains strong and gains momentum, ETH could extend the rally to retest its key psychological level at $3,000.
The RSI on the daily chart reads 69, pointing upward toward its overbought levels of 70, indicating strong bullish momentum. However, caution is warranted due to overbought signals suggesting potential for a pullback. Another possibility is that the RSI remains above its overbought level of 70 and continues its upward trend.
ETH/USDT daily chart
On the other hand, if ETH closes below its 200-day EMA at $2,441, it could extend the decline to retest its key psychological level at $2,000.
XRP holds ground despite weakening momentum
XRP price rebounded after retesting its 50-day EMA at $2.28 on Saturday and rose 3.18% the next day. However, on Monday, it declined and remained above the 50-day EMA level until the next day. At the time of writing on Wednesday, it continues to hover above this level.
If XRP breaks and closes below its 50-day EMA on a daily basis, it could extend the correction toward its next key support at $2.23.
The RSI on the daily chart reads 52, pointing toward its neutral level of 50, indicating fading bullish momentum. If the RSI moves below its neutral level of 50, it would give rise to strong bearish momentum and a sharp fall in XRP prices. The MACD indicator also switches to a bearish crossover on the daily chart on Monday, giving sell signals and indicating weakness.
XRP/USDT daily chart
Conversely, if the 50-day EMA holds as support, XRP could trigger a rally to retest its $2.72 resistance level.
Bitcoin, altcoins, stablecoins FAQs
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin’s market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
