The leading crypto, Bitcoin, and other cryptocurrencies have collapsed dramatically over the last month. Overall, the cryptocurrency market lost around $1 trillion in terms of value.
BTC/USD slipped from over $60K per BTC to under $35K from mid-April through to mid-May. Likewise, the second-largest, Ethereum, lost almost half its worth in just two weeks, with the XRP/USD also joining the party, and losing over 60% of its value.
In this update, we will analyze the fundamental and technical factors, to determine the future prices of Ethereum and Ripple.
Ethereum (ETH/USD) – A Fundamental and Technical Analysis
The ETH/USD continues to trade sideways, amid a lack of essential fundamentals in the market. A day before, the ETH/USD closed at $2,368.17, after placing a high of $2,544.13, and a low of $2,368.17. Ethereum extended its losses, dropping for a second consecutive session on Wednesday, despite some positive developments in the market. The decline in the ETH/USD could be attributed to the strength of the US dollar for the day, which was driven by a more optimistic Fed.
The Ethereum (ETH) price forecast for the rest of 2021 (source: FX Leaders) continues to be bullish, as the upward trendline extends support. The CEO of MicroStrategy, Michael Saylor, is well known for his support of Bitcoin. Still, he recently said that he believed that Ethereum and stablecoins have a spot in the cryptocurrency space. He was significantly more optimistic about some cryptocurrencies, especially Ether, as he called the second-largest cryptocurrency a “digital application”, which aimed to dematerialize the JPMorgan building, the banking establishments and all of the exchanges. He also emphasized that there was a place for the Ethereum blockchain and its native cryptocurrency.
Furthermore, a report from Bloomberg stated that the investment bank, Goldman Sachs, was preparing to offer Ethereum options and futures in the next few months. The head of digital assets at Goldman Sachs said they had seen much interest from clients, who are eager to trade, as they see the levels as a good entry point. Matthew McDermott also noted that it would be seen as a cleansing exercise to reduce the leverage and the excess within the system, particularly from a retail perspective. He said that the conversations with clients suggested that cryptocurrencies were here to stay, and he stressed that institutional adoption would continue. These comments were also in favor of Ethereum, but the ETH/USD continued declining on Wednesday.
Meanwhile, a Chinese University of Hong Kong, in partnership with the Ethereum software company ConsenSys, has launched a blockchain-powered coronavirus digital health passport. The Medoxie COVID-19 Digital Health Passport leverages the Ethereum blockchain to record certain medical events associated with the coronavirus, including test results, temperature checks, vaccinations and immunity.
According to ConsenSys, the private data of patients must remain confidential, and the users have complete control over data access. In this way, it would ensure that the data is validated and immutable. The Medoxie COVID-19 Digital Health Passport will provide solutions to these challenges, using Ethereum blockchain technology.
Despite all these positive developments, ETH/USD still dropped on Wednesday, amid the strong pullback in the US dollar. The greenback rose above 91 handles, as the US treasury yields were also increasing throughout the day. The comeback in the US dollar was driven by the latest decision by the Federal Reserve. The Fed expected higher inflation this year, and also predicted a hike in interest rates during 2023.
Ethereum (ETH/USD) Daily Technical Levels
Support Resistance
2,309.51 2,485.47
2,250.86 2,602.78
2,133.55 2,661.43
Pivot Point: 2,426.82
On the technical front, the ETH/USD pair is trading within a symmetrical triangle pattern, extending resistance at 2,629, with a support level of 2,302. Typically, symmetrical triangles form when investors are in a state of indecision and are waiting for some solid reason to trigger a bullish or bearish breakout. Since asymmetric triangles can break out on either side, the bullish breakout could lead to levels around 2,901 and 3,231. At the same time, a bearish breakout at 2,302 could lead the ETH/USD price down towards the 1,953 level.
Ripple (XRP/USD) – A Fundamental and Technical Analysis
Just like Ethereum, the Ripple is also exhibiting a thin trading volume and going through choppy sessions. One day ago, the XRP/USD closed at $0.83206, after placing a high of $0.86607, and a low of $0.83206. Overall, the XRP/USD coin is stuck within a narrow trading range, between $0.9306 to $0.7947, and violation of this range might help us determine further trends in the XRP/USD. The Ripple (XRP) price forecast for the rest of 2021 (source: FX Leaders) remains bullish, as the current dip is considered a short-term correction.
The Ripple token extended its losses for the second day in a row, despite some positive developments in its lawsuit against the SEC. The ongoing lawsuit with the US SEC (Securities and Exchange Commission) took a new direction when Judge Sarah Netburn denied the request by the SEC for documents that could reveal lobbying efforts by Ripple. The SEC accused Ripple of paying former Commodity Futures Trading Commission chairman Chris Giancarlo, to support Ripple publicly. However, the Judge said that Ripple’s lobbying efforts regarding the status of XRP were not relevant. Furthermore, earlier in June, the SEC asked the court to provide the agency with more time to investigate the case, and recently, the judge extended the SEC period to complete their investigations. The regulatory agency has until August 31 to conduct a rapid investigation, with expert investigations being extended until October 15.
However, the defendants have opposed this, arguing that the SEC had sufficient time to investigate this matter before filing the case, and Ripple also wants to move forward for summary judgment ASAP. Ripple stated, in response to the extension, that the SEC was unduly prejudiced against the business of Ripple. This put pressure on the Ripple token, causing the XRP/USD to drop on Wednesday. Furthermore, the US dollar was also strong across the board, after the Fed reiterated higher inflation expectations for 2021, and many fed officials projected two interest rate hikes in 2023. The rising prices of the US dollar weighed further on an already declining XRP, and as a result, the XRP/USD posted losses for the day.
Ripple (XRP/USD) Daily Technical Levels
Support Resistance
0.82073 0.85474
0.80939 0.87741
0.78672 0.88875
Pivot Point: 0.84340
The XRP/USD pair is trading sideways, inside a narrow trading range of $0.9306 to $0.7947. Looking at the 4-hourly timeframe, the MACD and RSI indicators for the XRP/USD coin are tossing above and below their crossover levels. Furthermore, the recent candles on the 4-hourly timeframe closed as a Doji and spinning top pattern. This demonstrates indecision among investors, and any major news event could determine further trends in the XRP/USD pair. A bearish breakout at the 0.7947 level could push the Ripple price towards the 0.6612 level. In contrast, a bullish breakout at 0.9306 could open up additional room for buying, until the 1.0766 level. Good luck!