Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) steadied on Wednesday, after correcting by nearly 5%, 10% and 5%, respectively, so far this week. BTC slips below $90,000, while ETH and XRP close below their key daily supports. The momentum indicators of these top three cryptocurrencies by market capitalization suggest a strengthening bearish trend, hinting at a deeper correction.
Bitcoin bears are aiming for the $85,500 mark
Bitcoin price closed below the 61.8% Fibonacci retracement level (drawn from the April low of $74,508 to October’s all-time high of $126,199) at $94,253 on Sunday. BTC declined 5.79% over the next two days, closing below key support levels: the 50-day Exponential Moving Average (EMA) at $92,118 and the previously broken upper consolidation boundary at $90,000. As of Wednesday, BTC is rebounding slightly after retesting the midpoint of the horizontal parallel channel at $87,787.
If BTC continues its correction and closes below the immediate support at $87,787, it could extend the fall toward the lower consolidation boundary at $85,569, which coincides with the 78.60% Fibonacci retracement level.
The Relative Strength Index (RSI) on the daily chart reads 41, below the neutral level of 50, indicating bearish momentum gaining traction. The Moving Average Convergence Divergence (MACD) indicator also showed a bearish crossover on Tuesday, further supporting the downward view.
On the other side, if BTC recovers, it could extend the advance toward the 61.8% Fibonacci retracement level at $94,253.
Ethereum could extend its correction as it closes below key support
Ethereum price was rejected from the 200-day EMA at $3,334 last week and has declined by more than 10% as of this week, closing below the daily support at $3,017 on Tuesday. As of writing on Wednesday, ETH is trading at $2,966.
If ETH continues its correction, it could extend the decline toward the 61.8% Fibonacci retracement level (drawn from the April low of $1,385 to the August all-time high of $4,956) at $2,749.45.
Like Bitcoin, Ethereum’s RSI and MACD indicators show strengthening bearish momentum.
However, if ETH recovers, it could extend the advance toward the daily resistance level at $3,017.
XRP momentum indicators signal a deeper correction
XRP price faced rejection from the 50-day EMA at $2.05 on Friday and declined by more than 9%, closing below the daily support at $1.96 on Tuesday. At the time of writing on Wednesday, XRP is trading at $1.90.
If XRP continues its correction, it could extend the decline toward the December 19 low of $1.77.
Like Bitcoin and Ethereum, XRP’s momentum indicators (RSI and MACD) also support a bearish view.
On the other hand, if XRP recovers, it could extend the advance toward the daily resistance level at $1.96.