The cryptocurrency market is poised for a mega recovery

• Bitcoin climbed to new annual highs over the weekend, retreated and stabilized between $ 13,600 and $ 14,000.
• Ethereum recovered from support above $ 370 only to face intense challenges at $ 400.
• Ripple has braced for a recovery after bouncing off the support at $ 0.23; the bulls are eagerly awaiting $ 0.26.

The bullish cycle, especially for Bitcoin and Ethereum, has continued to gain momentum over the past two weeks. However, the impact of Bitcoin’s rally to new annual highs, as well as hitting a new 33-month high, has failed to spill over to the rest of the cryptocurrencies, which are wallowing in increasing selling pressure.

At the time of writing, the cryptocurrency market is mixed red and green. Curiously, most of the top ten digital assets performed relatively well. The decentralized finance (DeFi) sector has yet to find a bottom, with most of the tokens in the ecosystem being corrected by more than 50% below 2020 peaks. As reported, Uniswap is among the few projects that show signs of potential recovery.

High market volatility is likely to continue this week, especially for Bitcoin. Elections in the United States are just around the corner. So external factors that can affect price action could increase. Most traders are taking a break from day to day activities to minimize the risk of waiting for stability to resume after the presidential election.

Bitcoin consolidates before a breakout at $ 15,000

The flagship cryptocurrency took off to new annual highs over the weekend after the June 2019 resistance was broken. BTC broke through the next key hurdle at $ 14,000 and traded hands at 33 months before retreating below $ 14,000.

Support was established above $ 13,600. On the upside, sellers appear to have camped at $ 14,000. In other words, BTC has decided to consolidate before another breakout enters the scene. Bollinger bands reinforce side trading action and the possibility of significant gains in the short term.

Bitcoin bulls appear to have regained control of the price, especially after the price bounced off the central boundary of the Bollinger bands. Furthermore, the Relative Strength Index (RSI) also emphasized the bullish outlook after bouncing off the midline.

BTC / USD 4-hour chart

It is worth mentioning that the bullish outlook will be invalidated if Bitcoin slips below the average limit of the Bollinger band. Additionally, buyers need to protect the $ 13,600 support as if their lives depended on it. Otherwise, the bellwether cryptocurrency could plummet to upgrade the anchor to $ 13,000.

Ethereum’s recovery suffers a temporary setback

The smart contract giant moved from last week’s crucial support provided by the 200 SMA over 4 hours to levels slightly above $ 400. This price action was supported by a breakout from a bullish flag pattern. ETH / USD also broke above the 100 SMA and 50 SMA, but did not sustain gains above $ 400.

However, the frozen momentum appears to be a temporary setback, especially when considering the RSI. The indicator shows the strength of a trend, in this case, the ongoing bullish price action. Ethereum must reclaim the position above $ 400 for the recovery to $ 420 to materialize. For now, the path of least resistance is upward despite short-term seller congestion.

ETH / USD 4-hour chart

It is worth mentioning that that bullish narrative will be invalidated if Ether is rejected at $ 400. The bearish price action could break out of the 50 SMA and retest the support at $ 390, as shown by the 100 SMA. Further correction from this level risks sending Ethereum back to the drawing board at 200 SMA.

Ripple looks forward to a breakout

The cross-border cryptocurrency was rescued from a potentially massive breakout aiming for lows below $ 0.2 from the support formed above $ 0.23. Recovery followed, but XRP failed to break out of the declining trendline.

The resistance at $ 0.245 also limited the price movement, hence the delay in reaching gains towards $ 0.26. However, the Moving Average Convergence Divergence emphasized the bullish hold by grinding upward to the midline.

To confirm the bullish outlook, buyers need to push XRP above the resistance highlighted by the moving averages; the 50 SMA and the confluence formed by 100 SMA and 200 SMA in the 4 hour interval. With all these obstacles in the rear view mirror, Ripple will most likely embark on the journey to break the barriers, aiming to test $ 0.26 and $ 0.3 respectively.

XRP / USD 4-hour chart

Looking to the other side of the picture, the expected breakout will be sabotaged if XRP fails to gain enough momentum to break down the resistance of the moving averages and the $ 0.245 hurdle. A reversal below $ 0.24 could also open Pandora’s box, resulting in further losses that could revisit the support areas at $ 0.23 and $ 0.22 respectively.