How long can crypto markets continue to rally?

by James · August 1, 2022

Bitcoin price momentum is slowing down as it struggles to cross the $24,565 resistance level.
Ethereum price reverses after failing to break above the $1,730 barrier, hitting a retracement.
Ripple price has cut through the $0.381 blockade, but failure to stay below it could lead to a correction.

Bitcoin price is showing signs of exhaustion after retesting a major hurdle. This development could result in a correction if bulls cannot make a comeback. The Ethereum price, despite the Merge story, remains correlated to BTC and could fall if the major crypto does. The Ripple price will immediately follow the two largest cryptos should they collapse.

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Bitcoin price and trend reversal

Bitcoin price has been rising and falling in channels since January 2022. Every time an ascending corrective channel has stopped and broken down, it has led to a huge crash. Profits have always consolidated around the point of control (POC), also known as the highest traded level.

As of now, the volume profile shows that the POC is at $21,128. Therefore, investors can expect a sudden increase in selling pressure at this level to push BTC down. A breakdown of this level places the major crypto at the mercy of an inflection point, which extends from $19,000 to $20,000.

If this support area also breaks down, investors can expect another flash crash that could push the Bitcoin price anywhere from $13,000 to $12,000.

BTC/USD 1-Day Chart

Although things look sluggish for the Bitcoin price, a rejection of the confluence of the 200-week SMA and 30-day EMA at around $22,700 could give buyers a chance to make a comeback. If BTC produces a daily candlestick close above $24,565 and turns this level into a support floor, the bearish thesis will be invalidated.

Ethereum price poised for pullback

Ethereum price bulls clearly showed exhaustion as they retested the $1,730 barrier for more than three days. Despite several attempts, ETH failed to move past this level, indicating a lack of buying pressure and a large stack of selling pressure.

Therefore, the next logical thing for the Ethereum price is to do tracking. A 9.7% drop seems likely to retest the $1,543 support level for ETH. Interestingly, this level roughly coincides with the control point, also known as the trade with the highest volume.

The volume profile is only drawn for the recent run-up which extends from 13 July to 1 August. This lets investors know if the uptrend was strong and supported by enough volume.

A breakdown of the $1543 support floor could send ETH down to $1350 and below this level the volume profile thins out considerably, suggesting a steep decline to $1080.

ETH/USD 4-hour chart

Regardless of the bearish signal, good news for the Merge enthusiasts could trigger a buying frenzy. If the Ethereum price produces a daily candlestick close above $1,730, it will invalidate the bearish thesis and trigger a potential move to $2,000.

Ripple price at a make-or-break point

The Ripple price surged 13% on July 30, rallying liquidity above the equally high levels of $0.387. This rally was impressive, but lacked any momentum, and as a result, the XRP price is on track to undo those gains.

In addition, the last four-hour candlestick has closed below the $0.381 support level, suggesting that a further downtrend is likely to follow. In such a case, investors can expect the Ripple price to return to the $0.340 support level.

XRP/USD 4-hour chart

On the other hand, if Ripple’s price stays above the $0.381 barrier, it confirms its position as a support level and will also invalidate the bearish thesis. In such a case, the XRP price may open the way to return to the $0.439 resistance level.