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Ethereum (ETH) in critical state, here’s why Bitcoin (BTC) fails to reach $70,000, will XRP reach an all-time low? By U.Today
U.Today – Even though it was starting to gain traction in the market, the severe and ongoing consolidation that produced virtually nothing and only brought ETH to around $3,800 was a major signal pointing to the asset’s potential future performance.
Despite the strong initial momentum, ETH’s price action surprised many traders. After reaching resistance at around $3,800, Ethereum entered a consolidation phase. The current decline we observed, which often indicates market indecision, was in this case predicted by a sideways move. In recent days the price of Ethereum has fallen significantly, approaching $3,500.
Overall the market has been feeling bullish, so many people were surprised by this sudden drop. There are several possible reasons for this unexpected behavior. Initial liquidity problems could be crucial. Furthermore, macroeconomic factors and investor sentiment are always important. Ethereum’s performance may have been impacted by recent global financial trends, regulatory news, or even larger sell-offs in the market. It is also crucial to keep in mind that fluctuations (such as drops below $70,000) often impact the entire cryptocurrency market, including Ethereum.
Technical indicators show that there has been a significant sell-off in ETH over a short period of time. The return of buyers to the market may indicate expansion potential. The moving averages also show another worrying pattern: the short-term MAs are crossing below the long-term MAs, which is typically a bearish signal. Despite the recent downturn, Ethereum fundamentals remain strong.
Bitcoin is in trouble
Bitcoin is struggling to break the $70,000 mark for a variety of reasons. The significant lack of purchasing power is one of the main causes. The price of Bitcoin has already reached all-time highs due to significant capital inflows.
However, depending on the market situation, fewer and fewer new buyers are willing to make these high-end investments. The lack of buying interest is making it difficult for Bitcoin to break the psychological barrier of $70,000.
Change in institutional behavior is another important component. Institutions are now moving money out of Bitcoin ETFs despite the fact that they have been crucial to previous Bitcoin rallies. This shift is partly a result of the search for better returns in alternative asset classes or new developments in the cryptocurrency industry.
Bitcoin’s price potential is weakened by decreasing institutional support because a significant portion of the buying pressure that pushed prices up came from these large-scale investors.
Furthermore, Bitcoin is currently absent from strong fundamental factors that have historically triggered massive bull runs. While the NFT craze played a similar role in 2021, the ICO boom in 2017 pushed Bitcoin to never-before-seen heights. There is currently no trend or invention like this that drives investor capital and enthusiasm towards Bitcoin on a large scale.
Bitcoin’s difficulties are also reflected in technical indicators. It appears that neither overbought nor oversold conditions exist as the Relative Strength Index (RSI) has been hovering around neutrality. This neutral RSI adds to the overall sense of indecision and uncertainty in the market, further preventing any significant price movement.
in trouble
The current state of XRP is truly problematic. The asset lost several key support levels such as 50 EMA, psychological levels at $0.5 and others. Such performance certainly places XRP in the list of best-performing assets. However, the only question now is: will it reach the yearly low of $0.44?
XRP has been steadily losing value over the past few weeks as it has been in a downtrend. The first real wake-up call appeared when the 50-day EMA disappeared. Subsequently, XRP fell below the critical psychological support level of $0.5 represented by the orange line at the 100-day EMA, further deteriorating its technical outlook.
The yearly low of $0.44 is the next significant support level for XRP. Considering the state of the market and technical indicators, the probability of reaching this level seems to be increasing. There is a long-term downtrend indicated by the 200-day EMA, which is still significantly above the current price.
The absence of significant purchasing power is one of the main causes of the collapse of XRP. The asset has difficulty maintaining its value, much less increasing it, in the absence of substantial buy-side interest. Due to investor caution driven by macroeconomic uncertainties, overall market conditions for cryptocurrencies are currently not very favorable.