Bitcoin prices fell slightly on Wednesday after hitting an all-time high of $108,353 the previous day. Ethereum price is facing a rebound from the $4,000 level, suggesting a short-term correction. Ripple price has fallen slightly after retesting the $2.66 level, suggesting a rebound in cards.
Bitcoin (BTC) price fell slightly during Wednesday's Asian session. Ethereum (ETH) and Ripple (XRP) followed in the footsteps of BTC and fell slightly. Technical indicators and price trends for all coins point to a possible short-term correction in the cards.
Bitcoin bulls are showing signs of exhaustion
Bitcoin price hit a new all-time high of $108,353 on Tuesday, after rising 3.32% in the previous week. As of writing on Wednesday, it was trading slightly lower at around $105,019.
If BTC faces a correction and closes below the $101,109 support level, it will likely extend the decline to retest the next support level at $90,000.
The Relative Strength Index (RSI) on the daily chart has rejected Tuesday's overbought level of 70 to 66 and is trending down, indicating that the bullish momentum is waning. If the RSI continues to decline and closes below the neutral level of 50, Bitcoin price will plummet.
BTC/USDT daily chart
However, if Bitcoin continues its upward trend and closes above the ATH of $108,353, the rally will extend to test the new ATH of $119,510. This level coincides with the 141.4% Fibonacci extension drawn from the November 4th low of $66,835 to the December 5th high of $104,088.
Ethereum price faces rejection near $4,000 and heads down
Ethereum price faced a rejection near the $4,000 level on Monday and fell 2.34% the next day. At the time of writing on Wednesday, it continues to decline around $3,858.
If the $4,000 level continues as resistance, ETH will extend the pullback to retest the weekly support at $3,522.
The RSI on the daily chart is 57, trending downward towards the neutral level of 50, showing early signs of bearish momentum. If the RSI closes below 50 each day, the price of Ethereum will fall sharply.
ETH/USDT daily chart
If ETH breaks and closes above the $4,000 level, the rally could extend by 12% and retest the December 9, 2021 high of $4,488.
Signs of indecision on Ripple
Ripple price found support near the $1.96 level on December 10 and rose 16% by Tuesday, but faced a slight rebound near the $2.66 level. At the time of writing on Wednesday, it was down slightly at around $2.53.
If the $2.66 level continues as resistance, XRP could extend the decline and retest the next support level at $2.21.
The RSI on the daily chart is at 65, negating the overbought level of 70, suggesting indecision on the part of traders.
XRP/USDT daily chart
If XRP continues its rally and closes above $2.66, the rally could extend to retest the psychologically important level of $3.00.
Frequently asked questions about Bitcoin, altcoins, and stablecoins
Bitcoin is the largest cryptocurrency by market capitalization and is a virtual currency designed to function as money. This form of payment is not controlled by any particular person, group, or entity and eliminates the need for third parties to participate during financial transactions.
An altcoin is any cryptocurrency other than Bitcoin, but some consider Ethereum to be a non-altcoin because it is these two cryptocurrencies that forks occur. If this is true, Litecoin would be the first altcoin to fork from the Bitcoin protocol and thus be an “improved” version of it.
A stablecoin is a cryptocurrency that is designed to have a stable price, and its value is backed by the reserves of the asset it represents. To achieve this, the value of one stablecoin is pegged to a commodity or financial instrument, such as the US dollar (USD), and its supply is regulated by an algorithm or demand. The main purpose of stablecoins is to provide an on/off ramp for investors who wish to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value, as cryptocurrencies are generally volatile.
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the market capitalization of all cryptocurrencies combined. This clearly shows the interest in Bitcoin among investors. BTC's dominance typically occurs around bull markets, where investors turn to relatively stable, high-market-cap cryptocurrencies like Bitcoin. Decreasing BTC dominance usually means investors are moving their capital and profits to altcoins in search of higher returns, which usually causes an explosive rally in altcoins.
