- Major cryptocurrencies are experiencing a downturn, with Bitcoin falling back to $67,000 after failing to break above $70,000.
- Chainlink is showing positive momentum, diverging from the overall market trend and suggesting a potential bullish move.
- Ripple's price compression hints at a potential breakout, with key support and resistance levels coming under focus.
- Invest like the big funds for under $9/month with our AI-powered ProPicks stock selection tool. Learn more here>>
Major cryptocurrencies are facing a downturn this week. Bitcoin, after failing to break above $70,000, has fallen back to $67,000, wiping out recent gains and signaling a possible downward trend.
Ethereum is also struggling to find direction within its recently established trading range of $3,600-$3,800.
However, there are a few bright spots in this gloomy market. Chainlink, unlike its peers, is exhibiting positive momentum. Its price movements diverge from the overall market trend, suggesting it might be poised for a bullish move in the near future.
Ripple, following its sharp decline in April, is experiencing price compression, hinting at a potential breakout too.
1. Ripple in a Price Squeeze: Breakout Looming?
XRP has fallen below its long-term uptrend channel after a steep drop in April. Recovery attempts since May have been weak, with the ongoing SEC lawsuit continuing to cast a shadow.
Technically, XRP is caught in a squeeze. Over the past month, the price has been confined to a tightening triangle pattern. XRP is currently testing the critical support level of $0.51. A weekly close below this level could trigger a continuation of the downtrend, potentially pushing XRP towards its next major support at $0.43.
However, a breakout is also possible. If there's a surge in demand, and XRP can break above the resistance zone around $0.52 (daily chart), buyers could take control and push the price towards the key resistance at $0.546. A successful breakout above this level could even see XRP climb as high as $0.66 in the short term.
Key takeaway: XRP's price action since April suggests a potential breakout is on the horizon. The $0.51 support and $0.54 resistance levels will be crucial in determining the direction of the breakout - either a bullish surge or a continuation of the downtrend.
2. Chainlink: Bullish Momentum Holds Strong
Chainlink (LINK) has shown surprising resilience despite a downward trend in the first half of the year. After losing its initial support at $16.5, it not only recovered that level but also found further support at $12.5. This price action indicates potential buying pressure.
The short and medium-term exponential moving averages for LINK are also trending upwards, suggesting a positive overall outlook. However, investors should be aware of a possible pullback towards the $16.5 level this week.
If buyers can hold LINK above $16.5 during this potential pullback, it could be a buying opportunity. Holding this support level could lead to future price increases, with potential targets of $23, $28, or even $33.
On the other hand, if LINK experiences weekly closes below $16.5, the bullish momentum could be broken. This breakdown might lead to a significant price drop, with a potential bottom forming around $9.
Meanwhile, Ethereum Consolidates After Strong Rally
Ethereum surged nearly 30% this month, successfully breaking out of a descending triangle pattern. This move aligned with the price targets projected by the triangle's highs and lows.
After briefly testing the $3,900 resistance zone, Ethereum has entered a consolidation phase, holding onto its gains from the breakout. The recent SEC approval of the first Bitcoin futures ETF initially spurred a price increase for Ethereum, but as spot Bitcoin ETF (TSX:EBIT) trading hasn't begun in the US yet, trading volume for Ethereum hasn't seen a significant rise.
Despite the lack of immediate impact on trading volume, the market generally expects ETF launches to happen this summer. Interestingly, even during pullbacks, Ethereum continues to see buying activity around the $3,600 support level, mirroring the broader market trend.
Investors are in a wait-and-see mode after the ETF news. The current market conditions support Ethereum's sideways movement. Technically, the $3,630 level remains crucial support. If Ethereum holds above this level, it could potentially retest the $3,900 resistance zone, depending on future market developments.
Ethereum's price is influenced by both ETF news and broader macroeconomic factors impacting the cryptocurrency sector. Positive news flow could potentially lead to a price acceleration towards the $4,400 - $4,800 range.
However, if daily closing prices fall below $3,600, support levels at $3,520 and $3,250 could come into play. Therefore, to avoid a correction, Ethereum needs to hold above the critical support zone of approximately $3,630.
***
Take your investing game to the next level in 2024 with ProPicks
Institutions and billionaire investors worldwide are already well ahead of the game when it comes to AI-powered investing, extensively using, customizing, and developing it to bulk up their returns and minimize losses.
Now, InvestingPro users can do just the same from the comfort of their own homes with our new flagship AI-powered stock-picking tool: ProPicks.
With our six strategies, including the flagship "Tech Titans," which outperformed the market by a lofty 1,745% over the last decade, investors have the best selection of stocks in the market at the tip of their fingers every month.
Subscribe here and never miss a bull market again!
Don't forget your free gift! Use coupon codes OAPRO1 and OAPRO2 at checkout to claim an extra 10% off on the Pro yearly and bi-yearly plans.
Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple points of view and is highly risky and therefore, any investment decision and the associated risk remains with the investor.