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After covered the poor state of the market in our most recent review, things turned around: Bitcoin might be gearing up for another surge, XRP is regaining solid market positions and Ethereum is entering a hiatus after being pushed down for days.
Ethereum sleeping?
The second-largest cryptocurrency in the world, Ethereum, is dealing with an odd and worrisome development: a disastrous decline in volatility. With ETH firmly settling around the $4,295 mark following weeks of quiet activity, price swings have all but stopped. Such a lull is not good for a market that depends on momentum.
Because of its high trading volume and steady market participation, Ethereum has a history of experiencing abrupt price swings, both upward and downward. ETH’s daily candles are getting smaller, volumes have decreased dramatically in comparison to the July spike and the asset seems to be stuck in a small range, which contradicts the current state of play. Stated differently, Ethereum is heading toward 0 volatility.
There are two possible interpretations for this lack of movement. Some who are optimistic might contend that Ethereum is just consolidating and gaining strength in preparation for its next breakout. While the 100-day EMA at $3,620 acts as a secondary cushion, the 50-day EMA at $4,124 offers strong short-term support. If volatility picks back up, ETH might soon move back into the $4,600-$4,800 range.
However, at the moment, the bearish interpretation is more credible. Usually, a collapse in volatility indicates waning investor interest, a reduction in speculative flows and the possibility of a steep correction should sellers intervene. ETH runs the risk of falling below $4,124 in the absence of fresh demand, which could pave the way for $3,620 and possibly the 200-day EMA at $3,201.
In summary, the market should be wary of Ethereum’s volatility collapse. Underneath the apparent stability of the lack of movement is the danger of fatigue. The second-biggest cryptocurrency in the world may be about to plunge further if ETH cannot draw in new investors soon.
Bitcoin's upcoming surge?
After weeks of correction and sideways trading, Bitcoin might be subtly getting ready for its next leg upward. BTC is currently trading at about $111,583, where it is comfortably above the 200-day EMA at $104,991, and just above the 100-day EMA at $110,770, forming a tightening wedge pattern. Even though the most recent rally attempt has not yet gained significant traction, technical indicators point to the possibility of a new uptrend developing.
At 47 points, the Relative Strength Index (RSI), which is still below the neutral 50 mark, provides one of the strongest signals. In the past, these levels have frequently indicated that Bitcoin is oversold in relation to its longer-term trend. This suggests that, even though trading volume is not as enthusiastic, there is still plenty of opportunity for buyers to intervene and raise prices.
From a resistance perspective, the immediate barrier is at the $112,362 level. A break above it would allow the 50-day EMA, which is currently at $114,878, to be reached. The recent downtrend would be invalidated, and a new bullish phase would probably be confirmed by a stronger move above $116,000.
To preserve its bullish potential, Bitcoin needs to defend $110,770 on the downside. A decline below this region would reveal the 200-day EMA, close to $105,000, which would represent a more definitive test of long-term trend support.
Although the market has been cautious, Bitcoin’s chart structure and technical indicators generally indicate that the asset is preparing for a possible uptrend. Bullish circumstances are produced by the combination of oversold RSI readings and consolidation close to strong support. Bitcoin may move from its current stagnation into a new upward cycle; if volume begins to increase in the coming weeks, it may retest $114,000 and higher.
XRP bears stand back
XRP is starting to show signs of recovery following weeks of bearish pressure and sideways trading. The asset is now trying to break through resistance levels that might pave the way for a wider recovery after rebounding from the $2.77 support, and is currently trading at about $2.91.
The first obstacle is the 26-day EMA, which XRP is currently testing. The most obvious indication yet that bulls are taking back control following a quiet August would be a confirmed close above this moving average. When that obstacle is overcome, the 50-day EMA at $3.07 will be the next target. This resistance has already absorbed selling pressure during the consolidation phase, making it structurally weaker than it was in prior months. Accordingly, the road to a long-term recovery appears much more attainable than it did at the beginning of the summer.
There is cautious optimism bolstered by momentum indicators. Indicating fresh buying interest, the RSI has risen back toward 50, separating from oversold levels. Although it is still far below July’s highs, trading volumes have increased marginally from the previous week, indicating that market participation is starting to rebound.
Upward targets will swiftly expand if XRP can successfully break the 50 EMA, with the $3.30 zone emerging as the next resistance, and the $3.50 region not far behind. The recovery story would be weakened if $2.77 were not held, and XRP might be pulled back toward the 200 EMA at $2.53.
At the moment, the market is giving off subtle but significant cues. Although there are still some early indications, XRP may not be fully recovered. If the 26 EMA gives way and momentum continues, a break above the 50 EMA might signal the start of XRP’s next bullish phase.
Dan Burgin
U.Today Editorial Team
