Just last week, I raised concerns over the short-term outlook of the crypto market as we continued to see a sea of red that showed no signs of abating. Still, despite the recent bounce in prices, I would be very cautious before jumping back in as no significant levels to the upside have been breached.
Let’s look at some technical zones for both XRP and Bitcoin.
Last week XRP sellers made another attempt at breaching the June lows, circa $0.50. However, this zone seems to have been rejected, and XRP has since been heading north.
Today we have a nice bullish impulsive move, and XRP needs to close and hold above its 200 EMA (above $0.74) with conviction if price is to reverse and continue its journey higher.
Notable levels to watch from here are $0.85, $1.10 and $1.30. To the downside, $0.50 is a level to watch closely, if this breaks, this could potentially open up the flood gates lower, wiping all of XRP’s 2021 gains.
Some upbeat rumours have been doing the rounds, and this has given Bitcoin a little bit of hope. Like XRP, Bitcoin has been stuck in a range since the middle of May, and this week for the first time since May, Bitcoin has pushed above its 200EMA. Although Bitcoin is showing signs of life, price must close and hold above $42k if this is to be a meaningful reversal.
What has been driving prices higher?
During an event last week Elon Musk said Tesla could soon start taking payments in cryptocurrencies once again, after developments in the market mean that his criteria for its sustainability could be met.
Over the weekend, rumours began circulating that Amazon was exploring cryptocurrencies and that the company was looking to move into supporting Bitcoin – a claim that Amazon has now denied.
If ever a catalyst was needed, this was it, cryptocurrencies made huge gains over Monday, giving investors a much-needed sigh of relief – and the mood seems to be continuing to improve.
As always, stay safe out there.