U.Today – Although it was starting to gain traction in the market, the severe and ongoing consolidation that produced virtually nothing and pulled ETH to around $3,800 was an important signal pointing to the asset’s potential future performance.

Despite its strong initial momentum, ETH’s price action surprised many traders. After reaching resistance at around $3,800, Ethereum entered a consolidation phase. The current decline we have seen, which is often an indication of market indecision, was predicted in this case by a sideways movement. In recent days, the price of Ethereum has dropped significantly, approaching $3,500.

The market was generally bullish, so many people were surprised by this sudden decline. There are several possible reasons for this unanticipated behavior. Initial liquidity issues could be crucial. Furthermore, macroeconomic factors and investor sentiment are always important. Ethereum’s performance may have been impacted by recent global financial trends, regulatory news, or further market sell-offs. It is also essential to keep in mind that fluctuations (such as declines below $70,000) often have an impact on the entire cryptocurrency market, including Ethereum.

Technical indicators show that there has been a significant sell-off of ETH in a short period of time. The re-entry of buyers into the market may indicate potential for expansion. Moving averages also show another worrying pattern: short-term MAs crossing below long-term MAs, which is typically a bearish sign. Despite the recent recession, Ethereum’s fundamentals remain strong.

Bitcoin is struggling

Bitcoin is struggling to break above the $70,000 threshold for a number of reasons. A significant lack of purchasing power is one of the main causes. The price of Bitcoin previously reached all-time highs due to significant capital inflows.

However, a decreasing number of new buyers are willing to make these high-end investments, depending on the market situation. The lack of buying interest is making it difficult for Bitcoin to surpass the $70,000 psychological barrier.

Change in institutional behavior is another important component. Institutions are now moving money out of Bitcoin ETFs, despite the fact that they were crucial to Bitcoin’s previous rallies. This shift is partially the result of people looking for better returns in alternative asset classes or new developments in the cryptocurrency industry.

Bitcoin’s price potential is weakened by decreasing institutional support because a significant part of the buying pressure that drove prices higher came from these large-scale investors.

Furthermore, strong fundamental drivers that have historically sparked huge bull runs are absent from Bitcoin at the moment. While the NFT craze played a similar role in 2021, the ICO boom of 2017 propelled Bitcoin to never-before-seen heights. There is currently no trend or invention like this that is driving investor capital and enthusiasm towards Bitcoin on a large scale.

Bitcoin’s difficulties are also reflected in technical indicators. It appears that neither overbought nor oversold conditions exist as the Relative Strength Index (RSI) has been circling around neutral. This neutral RSI increases the general feeling of indecision and uncertainty in the market, further preventing any significant price movement.

in trouble

The current state of XRP is really problematic. The asset has lost several important support levels such as the 50 EMA, $0.5 psychological levels and others. This performance certainly puts XRP on the list of best-performing assets. However, the only question now is: will it reach the annual low of $0.44?

XRP has been steadily losing value over the past few weeks as it has been in a downtrend. The first real red flag appeared when the 50-day EMA disappeared. After that, XRP fell below the critical psychological support level of $0.5 represented by the orange line on the 100-day EMA, further deteriorating its technical outlook.

The yearly low of $0.44 is the next significant support level for XRP. The probability of reaching this level appears to be increasing given the market situation and technical indicators. There is a long-term downtrend indicated by the 200-day EMA, which is still significantly above the current price.

The absence of significant purchasing power is one of the main causes of XRP’s decline. The asset has difficulty maintaining its value, let alone increasing it, in the absence of substantial interest from the buy side. Due to investor caution caused by macroeconomic uncertainties, general market conditions for cryptocurrencies are currently not very favorable.

This article was originally published on U.Today

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