- Bitcoin price is likely to witness a downturn as it approaches its key resistance level around $62,000.
- Ethereum price is at risk of declining after facing a major resistance at $2,843.
- Ripple price is stabilizing around the daily support level of $0.544, a possible recovery is in sight.
Bitcoin (BTC) and Ethereum (ETH) prices are likely to decline as they approach their key resistance levels, while Ripple (XRP) is showing stability around the daily support level of $0.544, indicating the potential for a recovery.
Bitcoin price faces rejection after retesting key resistance level
Bitcoin price has consistently faced resistance at the 61.8% Fibonacci retracement level of $62,066, which is the level from the swing high of $70,079 on July 29 to the low of $49,101 on August 5. It is trading 0.1% higher at $60,642 as of Wednesday.
If the 61.8% Fibonacci retracement level at $62,066 coupled with the broken trend line and the 100-day exponential moving average at around $62,649 continues to act as resistance, selling pressure could increase.
Failure to break above $62,066 could result in a decline of nearly 20% and possibly test the daily support level of $49,917.
On the daily chart, the Relative Strength Index (RSI) and the Awesome Oscillator (AO) are trading below their neutral levels of 50 and zero, respectively, indicating an impending bearish trend.
BTC/USDT daily chart
However, if Bitcoin closes above the August 2 high of $65,596, it would create a higher high on the daily chart, potentially leading to a 6% price increase and testing weekly resistance at $69,648.
Ethereum price is expected to decline after retesting its key resistance level
Ethereum price is retesting its 50% retracement level at $2,843 (obtained from the swing high of $3,562 on July 22 and the swing low of $2,124 on August 5). This level closely coincides with the daily resistance at $2,927, making it a key resistance zone. It is trading slightly 0.2% higher since Wednesday at $2,704.
If Ethereum price fails to rise above $2,843, it could drop 25% and test its weekly support level at $2,118.
This pessimistic outlook is reinforced by the daily RSI and AO, which have fallen below their neutral levels of 50 and zero, respectively, indicating a prevailing pessimistic trend.
ETH/USDT daily chart
Conversely, if the Ethereum price closes above the July 29 high of $3,396, it will make a higher high on the daily chart and possibly trigger a 5% increase to revisit the July 22 high of $3,562.
Ripple price shows potential for a rally after finding support around daily levels
Ripple was rejected at the daily resistance level of $0.643 on August 8, resulting in a 10.35% decline over the following three days. However, it found support around $0.544 on Monday, resulting in a 1.5% recovery the following day. Since Wednesday, Ripple is trading slightly higher at $0.578, up 0.45%.
If the daily support at $0.544 holds, XRP could gain 10% and reach the next resistance level at $0.643.
The RSI on the daily chart has crossed above its neutral level of 50 and AO is on track to do the same. The uptrend will be strengthened if both momentum indicators trade above their neutral levels.
XRP/USDT daily chart
Conversely, a Ripple close below the daily support level of $0.544 would result in a shift in the market structure as a lower low is created on the daily chart. This could result in a 9.5% decline, revisiting the August 7 low of $0.492.
Frequently Asked Questions About Cryptocurrency Metrics
The developer or creator of each cryptocurrency decides the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted through mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. Since its inception, a total of 19,445,656 BTCs have been mined, which is equal to the amount of Bitcoin in circulation. On the other hand, the amount in circulation can also be reduced by actions such as burning tokens or accidentally sending assets to addresses of other incompatible blockchains.
Market capitalization is calculated by multiplying the circulating supply of a particular asset by its current market value. For Bitcoin, the market capitalization is over $570 billion as of early August 2023, which is calculated by multiplying the over 19 million BTC in circulation by the Bitcoin price of around $29,600.
Trading volume refers to the total number of tokens for a particular asset that have been traded or exchanged between buyers and sellers within set trading hours, such as 24 hours. It is used to gauge market sentiment. This metric combines all volumes on centralized and decentralized exchanges. Increasing trading volume often indicates demand for a particular asset as more people are buying and selling the cryptocurrency.
Funding rates are a concept designed to encourage traders to take positions and ensure that the prices of perpetual contracts are in line with those of the spot markets. It defines a mechanism of exchanges that ensures that the periodic payments for future prices and index prices converge on a regular basis. When the funding rate is positive, the price of the perpetual contract is higher than the market price. This means that traders who are optimistic and have opened long positions pay traders who have short positions. On the other hand, a negative funding rate means that the prices of perpetual contracts are below the market price and therefore traders with short positions pay traders who have opened long positions.
