Arman Shirinyan
The cryptocurrency market is on the verge of a downward correction
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This recent downturn in Shiba Inu has alarmed investors as it suggests a possible bearish trend could begin in the coming weeks.
The market is showing signs of a trend reversal, evidenced by an increase in selling pressure. The change in sentiment can be attributed to various factors, including high whale activity, which often precedes volatility due to the significant volume of tokens they move. The current scenario suggests that the market is on a fragile path and local resistances are firmly in place, showing that the market is hesitant to push the price higher.
XRP/USDT chart from TradingView
Analyzing the chart, SHIB's immediate support lies at a level corresponding to the 50-day EMA. This level has historically served as dynamic support that could indicate a possible recovery point for the price. A break below could lead to a test of the next support level marked by previous lows.
For a bullish scenario to occur, SHIB would need to rally and break through local resistance, which is currently unchallenged. An upward movement in prices would need to maintain momentum to overcome recent high trading volumes, which were predominantly sales-oriented.
Bitcoin goes into correction mode
Bitcoin has fallen back from its recent high and failed to secure its level above the $51,000 level. The inability to break the $52,000 threshold has resulted in a significant correction, signaling a cooling from the significantly overheated market situation.
The recent price movement reflects a market correction that many analysts believe is necessary to maintain long-term sustainability. Overextended markets often pull back to find new support levels, which can be a healthy reset for the next advance. Bitcoin's performance over the past few days may not have been particularly impressive, but it is in line with typical market behavior after strong rallies.
From a technical perspective, Bitcoin's local support is now near the 50-day exponential moving average (EMA), a level closely watched by traders for possible recoveries. If BTC price breaks below this moving average, the next significant support will likely be found in the $47,000-$48,000 area, which has acted as both support and resistance in the past.
If selling pressure persists, a break below the 50-day EMA could trigger a sharper decline towards the $47,000 support zone. A break of this level could result in a further slide to the next support in the $43,000-$44,000 area, which is near the 100-day and 200-day EMAs. If these levels are not sustained, the market could witness an accelerated sell-off towards the $39,000-$38,270 zones.
XRP remains suppressed
The XRP chart shows the crossing of the 100-day and 200-day EMAs, a scenario that some would hastily call a “death cross.” However, let's delve into a more nuanced interpretation.
A “death cross” traditionally refers to the 50-day moving average crossing below the 200-day line, indicating possible long-term downtrends. In the case of XRP, we observe that the 100-day EMA is crossing below the 200-day EMA. Although not a classic death cross, this event could still be an indication that a pessimistic mood is brewing on the horizon.
XRP is currently hovering above a crucial support level, the break of which could see the price decline towards the next key support zone. Currently, the price is hovering around the intersection of the two EMAs, a critical point that could determine short-term market dynamics.
To remain bullish, XRP needs to sustain above the current support levels and push back through the crossed EMAs. A definitive move above these lines could invalidate the bearish signal and open the door for a rise towards previous resistance levels.
About the author
Arman Shirinyan
Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.
Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with in-depth analysis of crypto projects, and technical analysis of cryptocurrency trading pairs.
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
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