Dead cat bounce or genuine bullish opportunity?

  • Bitcoin price slips below weekly open, suggesting the possibility of a 10% downswing to $17,924.
  • Ethereum price will follow BTC’s and retest the $993 support level. 
  • Ripple price faces third rejection at the $0.336 hurdle and leans toward a correction to $0.306.

Bitcoin price shows signs of exhaustion as it reverses the bullish trend seen over the past three days. This has caused Ethereum, Ripple and other altcoins to take a backstep as well. Going forward, investors can expect this minor retracement to evolve into a foothold that bulls will use to extend the run-up.

Bitcoin price plans its next step

Bitcoin price climbed past the weekly open at $20,535 and swept Monday’s high at $21,068 on June 22. This bullishness caused a lot of altcoins to trigger exponential rallies. However, the exhaustion of buying pressure seems to be leading to a correction that has pushed BTC from $21,705 to $20,416.

This 7% downswing is likely to continue until BTC retests the $19,416 support level. Here, buyers have a chance to rescue the price and lift it higher, continuing the uptrend. However, failure could see Bitcoin price slide lower and sweep Monday’s low at $17,924. 

BTC/USD 4-hour chart

On the other hand, if Bitcoin price produces a higher high above the June 21 swing high at $21,705 and stabilizes above $21,068, it will invalidate the bearish outlook. This development could see BTC further rally to $23,000.

Ethereum price prepares to climb higher

Ethereum price rallied 35% between June 19 and June 22 and set a swing high at $1,192. During the process ETH produced a set of higher highs, which then  marked a top as bullish momentum exhausted.

This retracement is likely to further drive Ethereum price lower, at least until it revisits the $993 support level. Here, bulls have a chance to rescue ETH and trigger a run-up that could extend beyond the recently setup swing high.

ETH/USD 4-hour chart

ETH/USD 4-hour chart

If Ethereum price produces a four-hour candlestick close below $993 without any signs of a quick recovery, however, it will invalidate the bullish thesis. This development will further result in a retest of the $1,219 and $1,283 hurdles.

Ripple price needs to give it another go 

Ripple price has faced the $0.336 hurdle three times since June 13. Each time that the bulls triggered a rally to attempt a breakout, it failed. The most recent test was on June 21, which has resulted in a 5% pullback.

This downswing will likely continue until XRP price encounters the $0.306 support floor. A bounce off this level combined with an increase in buying pressure will be the key to triggering an extension of the ongoing uptrend.

If Ripple price manages to flip the $0.336 barrier, XRP might revisit the $0.401 hurdle after a 19% upswing.

XRP/USD 4-hour chart

XRP/USD 4-hour chart

While things are looking cautiously optimistic for Ripple price, a four-hour candlestick close below $0.306 will invalidate the recent upswing to $0.336. In such a case, XRP price might crash to $0.250, the next stable support floor.