Bellwether cryptocurrencies consolidated in Wednesday’s Asian session after adding gains on Tuesday amid favorable macro and crypto-specific developments. Bitcoin topped the closely-watched $30,000 level, propelled by falling long-dated government bond yields due to weaker-than-expected Chinese trade figures in July. The U.S. 10-year Treasury yield fell 11 basis points to 3.98%, while in Europe, the German long-dated Bund yield slumped 15.4 basis points to 2.445%. Sentiment also remained buoyant after payments giant PayPal unveiled plans to launch an Ethereum blockchain-based stablecoin pegged to the Greenback.
Moreover, the asset class appeared to benefit from ratings agency Moody’s downgrading the U.S. banking sector. Earlier this year, a liquidity crisis in the banking system sparked a significant rally in Bitcoin, with investors viewing the cryptocurrency’s network as an alternative banking system. “Bitcoin is holding strong. The correlation between the stock market and bitcoin is decoupling as bitcoin has proven to be a beneficiary of banking turmoil,” Amberdata’s Greg Magadini told CNBC.
Below, we identify important trading levels using technical analysis in Bitcoin (BTC), Ethereum (ETH), and Ripple’s XRP (XRP).
The flagship cryptocurrency’s price continues to consolidate near the 200-period simple moving average (SMA) after breaking above the top trendline of a descending triangle. However, a lack of significant volume accompanying the move raises questions about whether the bulls can keep driving upside momentum. A convincing close above the 200 SMA could see price make a run toward overhead resistance at around $31.240. Conversely, a breakdown below the triangle would reverse bullish sentiment and may trigger a fall to major support at $28.060.
Ethereum’s price also recently broke out from a descending triangle, with profit takers quick to book gains near the 200 SMA. Like Bitcoin, volumes remain lackluster, suggesting unconvincing buying conviction. Further upside could see bulls test closely-watched swing high resistance levels at $1,976 and $2,016, respectively. Alternatively, a close below the 50 SMA and triangle’s top trendline could initiate further falls to the $1,760 level where price finds support from a multi-month horizontal trendline.
XRP’s price appears to have found a local bottom at around $0.60. This area provides a confluence of support from the lower trendline of a falling wedge and the 61.8% Fibonacci level. Volume remains weak here also, indicating a lack of enthusiasm amid lingering SEC uncertainty. A break above the 50 and 200 SMAs sitting just above wedge pattern could accelerate gains, leading a move back towards recent highs around 0.83. However, a breakdown below the triangle could see price tumble back to pre-summary judgment support at $0.52.