- Bitcoin price is beginning to hint at a complex process.
- Ethereum price is getting rid of the rising wedge pattern to test the new Fibonacci extension level.
- XRP price needs a big day to get through to clear the trading base.
The lack of impulsivity and commitment in the bitcoin price points to a corrective rally. The price of Ethereum has been charging over the weekend, approaching a milestone. XRP price is falling in hesitation with little confidence that the rally will continue.
Cryptocurrency market froth warning indicator
The massive rises of several cryptocurrencies such as Binance Coin, Ethereum, Cardano and Dogecoin have captured the attention of all investors, not just traders who are focused on altcoins. The performance far outpaced the gains in Bitcoin and fueled speculation that “froth” in space increased the possibility of a day of reckoning for space soon.
At the forefront of the pessimistic view and arguments regarding foam is an important statistic, bitcoin’s share of the $2.6 trillion cryptocurrency market. It has fallen from a peak of 70% to below 45% since the beginning of 2021. More specifically, it shows the remarkable retail demand behind the increase in altcoins, at least according to institutional strategies.
Bitcoin market cap percentage
Central banks are encouraged by the increased stimulus to increase demand for cryptocurrencies, especially in light of the dwindling options for superior alpha production opportunities in more traditional investments, such as fixed income or stocks.
However, it is easier to dismiss the convincing rise of altcoins given historical levels of stimulus or unrefined investment by retail traders. Some of the credit should go to the crypto space as a wave of projects is bringing blockchain technology into the lives of ordinary people.
Bitcoin Price Tests Patience With Bullish Turbulence
The breakout from the inverse head and shoulders pattern on April 30th did not lead to the continuation of the convincing rally. Instead, it has been marked by slow price movement with a slight bullish tendency. To be precise, the bitcoin price is up about 20% from its April low and just 2% from the inverse head and shoulders breakout.
The lack of impulsivity and the inability to break away from the 50-day simple moving average (SMA) is more consistent with a corrective rally, and lacks institutional commitment. From a broader interpretation, the rounding pattern on the daily chart since the February high is starting to look like a complex top process rather than a reset or corrective one.
Bitcoin price is on the cusp of a slight change in trend as the rising trend line extends from the April low just across the 50-day simple moving average at $56,756, just $600 below the current price. A daily close below the support level could lead to a quick drop to the May 5 low at $53,000 and a right-hand shoulder drop at $52,369 is likely to invalidate the moderately bullish action theory.
The next support is the April low at $47,044, and if the situation deteriorates, Bitcoin should test the February low at $43,016.
BTC/USD daily chart
Renewing the rally from the April low will find notable resistance at the 361.8% Fibonacci extension of the 2017-2018 bear market at $63,777, the level that halted the attempt to reach new highs in mid-April.
If the bitcoin price succeeds in overcoming the aforementioned Fibonacci resistance, it should generate a rally to the 138.2% extension of the April retracement at $71,719 and then the 161.8% extension at $75,933. Further afield is the 461.8% extension of the 2017-2018 bear market at $80,540.
Ethereum price reaches a new milestone
On May 8, ETH nullified the rising wedge thesis with a massive gain of 12.41%, raising the 6-week return to 132% and almost equaling the performance levels printed in January and February.
It took Ethereum 72 days to rise from $2,000 to $3,000 and just seven days to go from $3,000 to $4,000. He talks about the rally’s momentum over the past two weeks.
Currently, Ethereum price is just $200 away from the 361.8% Fibonacci extension of the April retracement at $4,232, and the bigger outlook for ETH could target the 361.8% extension of the 2017-2018 bear market at $4,926.
ETH/USD daily chart
The primary support starts at the 261.8% extension of the 2017-2018 bear market at $3,587, followed by the 38.2% retracement of the rally from the February low at $3,087.
XRP Price at a Critical Rise Point
It’s been four days since XRP price broke from the base of a cup with a handle before reversing at the close of trading. The reversal triggered the plus four pullback rule which specifically states that if the breakout reverses back to the base, you give it four days to trade above the high of the breakout day. Failure to do so increases the possibility that the XRP price is ready to fall or even embark on a more complex pattern.
At the moment, the bullish outlook for Ripple is active, but it is time to treat this hypothesis with caution. The first resistance is the May 6 high at $1.76 and then the April high at $1.96, the psychologically important $2.00 level and the 61.8% Fibonacci retracement of the 2018-20 bear market at $2.08.
The measured move target for a teacup base with a handle is $3.16, which results in a 90% gain from the handle’s height at $1.66. A rise of this degree would put the price of XRP within reach of the 2018 high of $3.30.
XRP/USD daily chart
Failure to beat the May 6 high at $1.76 today should put traders on the defensive and at least prompt a cut in positions. A dip below the lower handle level at $1.31 could indicate that XRP price is forming a more complex bottom or is prone to a major fall.