The price of Bitcoin (BTC) is currently under adjustment pressure, trading below the $108,000 threshold at the time of writing on Tuesday. This move follows a strong surge, as many traders decided to take profits. The two leading altcoins, Ethereum (ETH) and Ripple (XRP), are also not exempt from this trend, decreasing nearly 2% and 3% respectively, after being rejected at key resistance levels of $3,000 and $3.
On-chain data shows that the net BTC amount transferred to exchanges (Exchange Netflow) has returned to positive levels, even peaking since February 25. This reflects the cautious sentiment of investors, as they may be preparing for a small-scale sell-off. If this trend continues, short-term adjustment pressure is likely to spread to both ETH and XRP.
Bitcoin adjusts after setting a new historical peak at $123,218
Bitcoin (BTC) recorded an impressive breakout when it established a new historical peak at $123,218 on Monday. However, the upward momentum was not strong enough to keep the price above the important psychological level of $120,000. As of the time of writing on Tuesday, BTC has adjusted down about 2%, currently trading below the $118,000 mark.
If the adjustment trend continues, the nearest support area on the daily frame at $111,968 may be the next stopping point.
The relative strength index (RSI) is currently at 66, trending down after falling out of the overbought zone at the beginning of the week. This movement indicates that bullish momentum is weakening. If the RSI continues to decline and breaks below the neutral level of 50, selling pressure may increase significantly, putting BTC at risk of a deeper decline.
Conversely, in a positive scenario, if BTC regains its recovery momentum and closes above the $120,000 mark on the daily frame, the market may witness a new wave of increase, bringing the price back to the historical peak of $123,218 – and even set a new ATH.
Ethereum weakens after failing to close above the $3,000 threshold
Ethereum (ETH) recorded an impressive closing session above the daily resistance at $2,724 last Wednesday, then surged strongly by 8.6% until Monday. However, the upward momentum stalled as ETH hit the key resistance area of $3,000 and could not break through. As of the time of writing on Tuesday, the price has slightly adjusted, currently trading around $2,971.
If the adjustment trend continues, the important support area at $2.724 may be tested once again.
The relative strength index (RSI) is currently at 69, having exited the overbought zone since Monday — a sign that the upward momentum is weakening and the bulls are beginning to be cautious.
Conversely, if ETH can maintain its upward momentum and close above the $3,000 mark on the daily frame, bullish momentum may be reinforced, opening up the opportunity to test the next resistance area at $3,730.
XRP adjusts after testing the psychological level of $3
XRP maintained strong upward momentum as it continued to break through and retest the important psychological level of $3 on Monday, after surpassing the key resistance area of $2.72 last week. However, by Tuesday morning, this coin was under profit-taking pressure and trading back below the $2.88 threshold.
If the current adjustment trend continues, XRP may return to test the short-term support area at $2.72 – a level that has served as a launch pad for the recent surge.
The daily RSI is currently at 76, showing signs of weakening and heading towards the overbought threshold of 70. A break below this level may indicate that demand is decreasing, opening up the possibility of a deeper adjustment in the short term.
However, if the bulls can close the daily candle above the $3 mark, the bullish outlook will be strengthened, with the next target being the peak on January 16 at $3.40.