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Price Analysis (29 December): A Sudden Drop in the Bitcoin Market Brought Thoughts for Turn

Bitcoin / US Dollar – General Overview

 

Sustaining the $51,000 level was a difficult task for the Bitcoin market as it tried to break the resistance without any momentum behind it and establish a new bullish path, towards the $54,000 target for the next period.

 

Instead, the market found a fierce resistance in the $51,000 level, making the market make a step back and correct towards the heavy support zone around $47,000, which is the base for the current trend, in terms of technical support. We can see that the market was not strong enough to sustain the bullish perspective.

 

The positive scenario for the market will be a rebound for the price, as it will stand above the $47,000 support zone and will try to reclaim higher levels. On the opposite side, the negative scenario would be a breakdown below the $47,000, a move that could lead the market to a worse position that will need more depth and trials to regain the profits from the current season.

 

Short-Term View

 

In the short-term view, the resistance level around $51,000 is much clearer, indicating that there was not a single move from investors that could bring a change in the market. Even if the moving averages cross suggested a bullish uptrend for the next moves, they weren’t confirmed and we should have a couple more days to find out if this was a fake signal or not.

 

The trading volumes have not shown anything special as the overall market view indicates a more steady position, without much action in it.

 

XRP / US Dollar – General Overview

 

In the Ripple market, after a brief consolidation around $0.80 – $0.85, there was an uptrend towards the main price target for the market, the $1.00 price level. The $1.00 price level has acted both as a resistance and support level, creating a standpoint that could act as a rule-of-thumb in future occasions.

 

Every time that the price is reaching this price target, a new trend is coming up. In this situation, the $1.00 level acted as a strong resistance point, making the price fall again, around $0.85. As we can see in the diagram below, there are no support levels in the market between $1.00 and $0.60. This means that the market has no indication or previous experience about what can happen in an event of minor corrections.

 

The only data about this zone is the previous consolidation period around $0.80, so we expect that the market will continue to float around those levels, bringing a more stable outlook for the next few days. The positive scenario for the market will an uptrend setting that will drive the price again around $1.00 while a negative scenario will make the price drop in steps, from $0.70 to $0.60 to $0.50 and so on.

 

Taking into consideration that the trading volumes are way down than in previous days, we expect that a strong entrance from other investors will make a difference in the price on either side (probably in the positive one).

 

The moving averages (50-day and 200-day) had crossed a week ago, predicting a positive uptrend for the next period. This move was confirmed as the price climbed to $1.00 but now all the profits from the signal have been eliminated from the last correction.

 

Short-Term View

 

In the short-term diagram, we can observe that the moment when the market hit the $1.00 spot, it collapsed to $0.92, showing that there was no momentum in the market to support any other positive move above that point. As the market tried to hold a position around $0.90, Bitcoin made a steep correction, bringing the rest of the market in the same situation.

 

This was the spark that plummeted Ripple below $0.90 and we will probably see it again in the consolidation zone between $0.80 and $0.85.

 

Day-Trading View

 

In the 4-hour diagram, we can more volatility in the Ripple market, a thing that could bring us in a favorable position if we exploit some patterns that are evident in the day-trading market. As we can see in the diagram below, the locally high levels and the uptrends were steep as investors were trying to push the price higher in smaller time frames.

 

Apart from that, the quick uptrends were often followed by a counter-active move that made the price come back a little higher from the previous level. Those sudden moves showed that there are many opportunities for a quick profit in the market in some hours. Those moves predict that more volatility will be implied in the market in the current phase as a sudden spike in the market might occur any time soon, as a reaction to the correction.

 

Indicators

 

MACD index remained on the positive side but slowly decreased. Showing that the market is losing faith in a price surge and will probably get ready for another correction formation in the short-term view. Although there was a surge in the price, the momentum wasn’t strong enough to beat the resistance level around $1.00.

 

RSI index fell around value = 45, indicating that there is a stable prospect for the market, with a negative outlook for the next days. The cross between RSI and 14-day MA shows that the market might react in the correction phase, a signal that is not supported by other metrics in the market.

 

Conclusion

 

As Bitcoin corrected further, its price touched $47,000 again, missing the point of $50,000 in a short time. Its drop affected the entire market as it was evident in the Ripple market that we analyzed today.

 

Ripple took a minor hit in the market as it touched the $1.00 resistance point, moved down to $0.92, and finally dropped to $0.86, along with the Bitcoin trend. We expect a stable outlook for the market, following the current trend, established from the Bitcoin market.

George Foroglou

George Foroglou

George Foroglou heard first time about Bitcoin in a Christmas dinner in December 2013. As Finance student, he published articles regarding Bitcoin adoption, blockchain applications and IoT monetization strategies. From 2017, he is an active trader in the Bitcoin and other altcoins market, using mostly Technical Analysis. He has worked for plenty web portals, giving insightful articles about technical and fundamental analysis.

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