We take a look at Bitcoin and XRP prices as of December 30th, 2021. Aside from fundamentals, we rely heavily on technical analysis to assess overall sentiment. This is achieved by identifying key support and resistance levels that traders and investors will be watching in the short term. Following a recent slide, what levels are traders and investors watching to cap off the year?
At the time of this report, Bitcoin is currently trading at $47,149. The largest cryptocurrency by market cap has fallen ~ 3.2% over the last week. Sentiment in general has been pretty bearish over the last month. This correlates to a ~ 18.4% drawdown for Bitcoin during the last 30 days. If prices hold steady, December could mark the 2nd worst month for Bitcoin in 2021. Back in May of this year, Bitcoin prices fell a staggering ~ 35%.
Despite these pullbacks, the digital asset has gained ~ 72% year to date. For those diversified in both stocks and crypto, Bitcoin has smoked the S&P 500 index for the third year in a row. At the time of this report, the S&P 500 index has grown just north of 28% year to date.
Bitcoin Technical Analysis
We remain bearish on Bitcoin until key resistance levels can be slashed. Let’s take a look at the chart setup below.
During the most recent sell-off, Bitcoin’s price dropped below $49,000 levels. Historically speaking, we have seen similar price action on two different occasions this year. During both events, BTC’s price fell to $43,700 support levels before experiencing a reversal. With this being said, we think that Bitcoin could very well test $43,700 levels before attracting the bulls. On the contrary, we believe bullish sentiment will enter the market when BTC price can slash $49,000 resistance.
Another bearish indicator we are looking at is ROC ( rate of change ). As long as ROC is below 0.00, BTC should maintain bearish sentiment. As discussed in previous reports, we like to see ROC above 0.00 before we take a bullish angle.
At the time of this report, XRP is currently trading at $0.84. The 8th largest cryptocurrency by market cap has tanked ~ 12% over the last week. This is just shy of XRP’s ~ 15% drawdown during the last month. Despite this price suppression, XRP has surged ~ 280% over the last year. Even with the ongoing legal battle between the SEC and Ripple, XRP has outperformed Bitcoin during the last year. Due to continued uncertainties around the lawsuit, XRP has seen larger than normal outflows from exchanges.
Arguably speaking, this seems to be the investor’s way of mitigating lawsuit risk. Investors do not want to be in a scenario where another crypto exchange delists XRP and limits the ability to withdraw the digital asset.
On the contrary, XRP has one of the strongest social media following, and a majority of these investors believe Ripple will prevail in the SEC lawsuit. If this comes to fruition, XRP has some of the largest potential upsides, given its suppression over the last year.
XRP Technical Analysis
We remain bearish on XRP until it can surpass important resistance levels in the short term. Let’s take a look at the chart setup below.
At the time of this report, XRP is trying to hover above resistance at $0.85. As discussed above, we will remain bearish until the XRP price can do so. As long as the price stays below $0.85, we believe XRP could experience further drawdowns to support at $0.72.
If we do see a reverse in sentiment and XRP cracks $0.85, we believe bulls will push it to a resistance test of $1.07 in the short term.
As discussed in the Bitcoin analysis, we continue to follow ROC on both Bitcoin and XRP. ROC ( rate of change ) for XRP is bearish at the moment. We need to see ROC above 0.00 before we see a change in sentiment.
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