U.Today – Critical support is present at the 26 EMA, a level that maintains the asset. The short-term trajectory of the asset is likely to be determined by the ongoing battle at this price. A recovery is possible if XRP manages to bounce back there, indicating a reversal of the current downtrend. However, there can be serious fallout consequences if the above is violated.
In line with XRP’s downtrend line, the 26 EMA functions as dynamic support. The reversal is even more important because of this merger, which increases the pressure on the asset. Increased trading volume, along with a successful move above the 26 EMA, could push XRP back to the $2.20 and $2.50 levels. Such a breakout could spark buying interest and likely add more confidence to market participants.
On the contrary, there could be serious consequences if XRP fails to overcome this obstacle. The asset could test lower supports if it is rejected at this level, possibly confirming the current downtrend. After $1.79, which corresponds to the 100 EMA, there is the first notable support level at $1.47.
XRP’s market structure will be severely weakened by a break below these levels, which could push the price closer to $1.07, its next major support zone. The relatively low trading volume that has accompanied XRP’s recent moves is an additional concern.
wakes up
Ethereum has made a higher low, which is a strong short-term bullish signal and is showing encouraging signs of recovery. This change implies that the market may be preparing for a period of recovery that could reverse the recent downtrend. The lack of significant trading volume further helps reduce selling pressure, which is highlighted by the formation of higher lows.
Low volume may seem alarming at first glance, but it also means that the momentum of the decline is diminishing. The bulls could take back control in the coming weeks, especially if new capital enters the market in January. The 50 EMA, a crucial indicator of short-term market trends, is one of the critical support levels that ETH is currently holding above. The asset may soon test the $3,544 resistance level if it continues to move higher.
Ethereum’s reputation will likely be restored if it breaks above this level, opening the door to test the $3,800 range. But the general downward trend of the market is still a cause for concern. Ethereum’s full-blown recovery is still hampering broader market sentiment.
An increase in trading volume and increased buyer participation are necessary to maintain ETH’s upward trajectory. Ethereum may experience a turning point in January. Historically, the beginning of the year saw a resurgence of interest in the cryptocurrency market. ETH could pave the way for a stronger recovery if it can maintain its current trajectory and stay above $3,000.
It loses against the dollar
At levels that heavily influenced Bitcoin’s momentum, (DXY) continues to rise. Historically, Bitcoin and DXY have had an inverse relationship: Bitcoin finds it difficult to maintain shares when the dollar appreciates. As DXY gains ground, this dynamic repeats itself. Bitcoin is under downward pressure due to the recent recovery in the DXY, which is currently trading around 108.
Due to the Federal Reserve’s continuous monetary tightening policy and strong economic data, investor confidence in the US economy is reflected in the strengthening of the dollar. As a result, demand for dollar-denominated assets has increased from riskier options such as bitcoin.
As the dollar strengthens, Bitcoin’s recent rally has stalled. Bitcoin has lost momentum after trying to break the psychological barrier of $100,000 and is currently trading below a key resistance level. As outflows from the cryptocurrency market are often driven by a strong dollar, the rise in DXY has made it difficult for Bitcoin to sustain buying interest.
Bitcoin is seen as a hedge against the devaluation of fiat currencies, which explains this inverse relationship. Investors turn to Bitcoin as a substitute for value when the dollar falls. However, a rising DXY is reducing this appeal and sending Bitcoin into a bear market. Future prospects for bitcoin recovery depend on a possible reversal of DXY’s trajectory. If Bitcoin stabilizes or declines, it may gain ground and may start to rise again.
This article was originally published on U.Today