On the 18th of December, the US Federal Reserve announced a 0.25% interest rate cut, but its hawkish outlook for 2025 led to a decline in Bitcoin’s value, pushing it towards $100K.
Similarly, during the same trading period, Ethereum witnessed a 6.8% decrease in its value, while Ripple experienced a significant 10% drop. Most major digital assets found temporary support levels as analysts expressed positivity towards riskier assets.
With this perspective in mind, will these top three cryptocurrencies recover or continue to face downward pressure? Let’s delve into the charts to gain some insights.
Bitcoin Holds Strong at $100K: What About ETH and XRP Recovery?
Beginning on the 12th of December, Bitcoin saw support around the $100K mark. The recent market sell-off following the FOMC meeting stabilized at this psychological level, affirming it as a reliable support zone.
Notably, the 100-day EMA, which had previously prevented Bitcoin from dropping significantly since October, coincided with the lower bounds of its trading channel. This convergence strengthened the $98K-$100K range as robust short-term support for Bitcoin.
If this support level holds, a move towards the mid-range of $104K and potentially higher towards $108K-$109K could be possible. On the contrary, a breach below this support could trigger further selling pressure and embolden bearish sentiments, potentially leading Bitcoin towards $90K and $85K.
It’s worth mentioning that the recent price decline was influenced by a search for liquidity, primarily focused at levels of $102.5K, $105K, and $108K (highlighted in yellow).
Assuming trading volumes remain low during the Christmas holiday, Bitcoin is likely to see a rebound driven by the existing liquidity support.
How will Ethereum and Ripple respond to these potential price movements in Bitcoin?
Ethereum and Ripple Price Analysis
Ethereum, often referred to as the leading alternative cryptocurrency, has been consolidating within the $3.5K to $4K range since the start of December. Similar to Bitcoin, it dropped from $4.1K but found support around the lower end of the range at $3.5K.
A potential upward move towards $3.7K and $4K could materialize if the lower range holds. A decisive break above the trendline support (indicated in white) would confirm a resurgence of the upward trend that commenced in November.
In the event of a breakdown below the channel’s support, Ethereum bears might drive the price towards $3.3K or even $3.1K.
Interestingly, Ripple’s chart appears comparatively stable among the top three cryptocurrencies. Despite a 10% decline, Ripple managed to stay above its Q4 trendline support, a critical level to monitor for the remainder of 2024.
Bulls could potentially target the $2.8 level or aim for a rise towards the 2021 cycle high of $3.3 by leveraging the existing support. Positive sentiment is further supported by recent developments such as the launch of stablecoin RLUSD and the anticipation of ETFs in 2025.
However, a breach below this support level could empower short sellers to push Ripple lower towards $2 or even $1.6.
In summary, Bitcoin, Ethereum, and Ripple successfully defended crucial levels, hinting at a possible reversal in market trends towards the positive side. Nonetheless, the impact of lower trading volumes during the festive season on the recovery remains uncertain.