The current Bitcoin (BTC) price is under adjustment pressure, trading below the $108,000 level at the time of writing on Tuesday. This move comes after a strong rally, as many traders decided to take profits. The top two altcoins, Ethereum (ETH) and Ripple (XRP), also follow this trend, dropping nearly 2% and 3%, respectively, after being rejected at key resistance levels of $3,000 and $3.
On-chain data shows that the net amount of BTC transferred to exchanges (Exchange Netflow) has returned to positive levels, even reaching its peak since February 25. This reflects a cautious investor sentiment, 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, setting 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. By the time of writing on Tuesday, BTC had adjusted down by about 2%, currently trading below the $118,000 mark.
If the correction trend continues, the nearest support zone on the daily frame at $111,968 could 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 indicates that bullish momentum is weakening. If the RSI continues to decline and breaks the neutral mark of 50, selling pressure could significantly increase, putting BTC at risk of a deeper decline.
Conversely, in a positive scenario, if BTC regains its recovery and closes above the $120,000 level on the daily frame, the market may witness a new wave of increases, bringing the price back to the historical peak of $123,218 – and even setting a new ATH.
Ethereum weakens after failing to close above the $3,000 mark.
Ethereum (ETH) recorded an impressive closing session above the daily resistance level at $2,724 last Wednesday, then surged strongly by 8.6% until Monday. However, the momentum has stalled as ETH reached the key resistance zone of $3,000 and failed to break through. As of the time of writing on Tuesday, the price has slightly adjusted and is currently trading around $2,971.
If the correction trend continues, the important support zone at $2,724 may be tested once again.
The Relative Strength Index (RSI) is currently at 69, having escaped the overbought zone since Monday — a sign that the upward momentum is weakening and the bulls are starting 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 zone at $3,730.
XRP adjusts after retesting the psychological mark of $3.
XRP has maintained strong upward momentum, continuing to break through and retest the important psychological level of $3 on Monday, after surpassing the key resistance zone of $2.72 last week. However, by Tuesday morning, this coin is under profit-taking pressure and trading back below the $2.88 threshold.
If the current correction trend continues, XRP may return to test the short-term support zone at $2.72 – a level that has served as a launchpad for the recent rally.
The RSI indicator on the daily frame is currently at 76, showing signs of weakening and heading towards the overbought threshold of 70. A break below this level could indicate that buying pressure 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 reinforced, with the next target being the peak area on January 16 at $3.40.
