- Bitcoin price declines 2% on Tuesday after reaching a new all-time high of $123,218 on Monday as traders begin to realize profits.
- Ethereum price faces rejection near the $3,000 level, suggesting a potential short-term correction.
- Ripple’s XRP slips 3% after briefly retesting the key $3 resistance, signaling selling pressure at higher levels.
Bitcoin (BTC) price faces a pullback, trading below $108,000 at the time of writing on Tuesday as traders opted to take profits following strong rallies. Ethereum (ETH) and Ripple (XRP) followed BTC’s footsteps, correcting nearly 2% and 3%, respectively, facing rejection from their key levels of $3,000 and $3.
On-chain data shows that BTC’s Exchange Netflow (the difference between BTC flowing into and out of the exchange) is positive and reaches levels not seen since February 25. An increase in inflows indicates investors are likely sending BTC to sell and could contribute to the short-term pullback in ETH and XRP as well.
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Bitcoin faces a correction after reaching a new all-time high at $123,218
Bitcoin price rallied, reaching a new all-time high of $123,218 on Monday, but failed to close above the psychological level of $120,000. At the time of writing on Tuesday, it dipped 2%, trading below $108,000.
If BTC continues to face a correction, it could extend the decline to the next daily support level of $111,968.
The Relative Strength Index (RSI) reads 66, pointing downward after rejecting its overbought conditions on Monday, indicating fading bullish momentum. Moreover, if the RSI continues to decline and closes below its neutral level of 50, BTC could fall sharply.
BTC/USDT daily chart
However, if BTC recovers and closes above the $120,000 level on a daily basis, it could extend the recovery toward its all-time high at $123,218.
Ethereum dips as it fails to close above the $3,000 mark
Ethereum price closed above its daily resistance at $2,724 on Wednesday and rallied 8.6% until Monday but failed to close above the $3,000 resistance level. At the time of writing on Tuesday, ETH has declined slightly, trading below $2,971.
If ETH continues its pullback, it could extend the decline toward its daily support at $2,724.
The RSI reads 69, slipping below its overbought conditions on Monday, indicating fading bullish momentum.
ETH/USDT daily chart
On the other hand, if ETH closes above the $3,000 level on a daily basis, it could extend the rally to retest its next daily resistance at $3,730.
XRP faces a pullback after retesting its $3 mark
Ripple’s XRP extended the rally, retesting the $3 psychological level on Monday after breaking above the daily resistance at $2.72 last week. However, at the time of writing on Tuesday, it faces a pullback and trades below $2.88.
If XRP continues its pullback, it could extend the decline to retest its daily support at $2.72.
The RSI on the daily chart reads 76 and points downwards toward its overbought level of 70, indicating that XRP is in extreme overbought territory. Moreover, the RSI continues to decline and falls below its overbought level of 70. In that case, it indicates fading bullish momentum and potentially paves the way for a deeper correction in the short term.
XRP/USDT daily chart
Conversely, if XRP closes above $3 on a daily basis, it could extend the rally to retest its January 16 high at $3.40.
Bitcoin, altcoins, stablecoins FAQs
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin’s market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
