Recent price movements for Bitcoin clearly show that market tension is rising as the asset tries to break through a significant resistance level close to $120,000. Bitcoin has tested the upper resistance band twice in the last week, but both times it was unable to sustain a breakout, and sellers intervened to drive the price back down.
From a technical standpoint, this repeated rejection indicates that $120,000 is proving to be an unbreakable barrier both technically and psychologically. Bullish momentum runs the risk of stalling if it does not close decisively above this level. The 26-day and 50-day exponential moving averages (EMAs) are now steadily rising and closing in on Bitcoin’s price, which is adding to the pressure.
If the “digital gold” enters hibernation here, these EMAs may compress the market, forcing Bitcoin to move. The trading volume is the most alarming indicator. There was not much buyer conviction at these high levels, as evidenced by the relatively low volume of both breakout attempts.
In the past, genuine breakouts needed a discernible spike in trading activity to withstand selling pressure and maintain upward momentum. In the absence of that, the chance of a fakeout increases significantly. Bitcoin might be in danger of reverting to important support areas if buyers are unable to regain control quickly. The immediate downside targets are $116,350 and $114,380. A clean breakout above $120,000 on high volume might lead to a sharp increase in price that could reach previously unheard-of heights.
XRP in symmetrical triangle
On the daily chart, XRP is trading within the enclosing limits of a symmetrical triangle pattern, heading toward a potentially explosive point. The price is currently hovering near the formation’s tip. Whenever assets reach the edge of such formations, volatility implosions appear.
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A period of consolidation preceding a notable price swing is usually followed by the symmetrical triangle, which is made up of converging trendlines of higher lows and lower highs. After XRP‘s strong rally toward $3.70 in late July, which was followed by a slow decline that kept the market tight in a narrowing range, the current structure has been taking shape.
One important technical finding is that as the triangle ages, trading volume decreases. Because market players wait for a breakout to give them direction, this decline in activity frequently occurs before volatility spikes. Once volume returns, it can fuel an outsized move, in either direction, depending on whether buyers or sellers seize control.
With a confirmed breakout above the descending trendline, bullish momentum may be reignited on the upside, possibly aiming for the previous swing high around $3.70 and if momentum continues setting up for new yearly highs.
On the other hand, a break below the rising support line might allow for a retest of the $2.83 and $3.06 support zones, where the 50-day EMA is currently located as extra support. Given how quickly the triangle’s tip is approaching, the timing points to the possibility of an impending volatility spike. The form is where traders will be looking for confirmation.
Ethereum stays dominant
With the second-largest cryptocurrency by market capitalization maintaining its market leadership and rising to new annual highs, Ethereum’s remarkable run is still going strong. Now that price action has broken through all of the resistance levels, ETH has an open path to the psychological $5,000 mark. Strong upward legs that build on each other’s momentum have been the rally’s defining feature.
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From the break above $3,000 to the most recent push above $4,400, Ethereum’s daily chart has continuously shown bullish structure. The focus of the larger market on ETH has increased this strength as the asset is seeing a significant influx of sentiment and liquidity. Technical traders are aiming for $5,000 as the next logical target because the chart currently shows no notable resistance levels ahead.
Nevertheless, the volume profile has a more cautious picture in spite of the aggressive price advance. In contrast to previous stages of the rally, the current surge has been bolstered by comparatively low trading volume, which may indicate that momentum may wane in the absence of greater participation.
In addition to the warning, the relative strength index — or RSI — is displaying a bearish divergence, with the price reaching higher highs and the RSI reaching lower highs. This pattern may precede a pullback or consolidation phase and frequently indicates waning bullish pressure.
With market dominance close to its peak levels and overwhelmingly positive sentiment, Ethereum is in control for the time being. A short-term correction could allow bulls to reload before the final push to $5,000, or it could sustain the rally without new buying volume.
