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▲ Bitcoin (BTC), Ethereum (ETH), XRP (XRP)/ChatGPT generated image ©
Major large-cap assets in the cryptocurrency market, which recently experienced steep corrections, are now consolidating their support lines and embarking on a rebound, facing a technical watershed moment towards a full trend reversal and an upward breakout.
According to FXStreet, an investment media outlet, on May 22 (local time), major assets leading the cryptocurrency market, including Bitcoin (BTC), Ethereum (ETH), and XRP (Ripple), showed a synchronous recovery during Friday's trading session. While BTC settled above key support levels, attracting dip-buying, ETH and XRP are also closely approaching a test of strong resistance lines to break out of their long-term downtrends.
Bitcoin, the market leader, is defending key moving averages and accelerating its rebound. BTC is currently trading above the $77,704 level, stimulating dip-buying, and is firmly holding the cluster of 50-day and 100-day Exponential Moving Average (EMA) support lines located near $76,840 and $76,920, respectively. However, the 200-day EMA at $81,458, which determines the long-term trend on a weekly basis, and the Fibonacci 50% retracement level of the recent downward wave at $78,962 are weighing heavily overhead. Thus, it is interpreted as a sideways consolidation phase, gathering energy, rather than a full breakout. With the daily Relative Strength Index (RSI) below the baseline of 50 and the Moving Average Convergence Divergence (MACD) remaining in negative territory, the upward path to $83,437 and eventually $84,410 will only open if it definitively surpasses the primary resistance of $78,962 and the 200-day EMA. Conversely, if support breaks, it could slide to $74,487 and the mid-term demand zone of $70,995.
Ethereum is calming its downtrend and testing a key resistance line that could be the first step towards a trend reversal. Currently hovering around $2,137, ETH is precisely attempting to break past the immediate resistance at the Fibonacci 23.6% retracement level of $2,138. Although the price is trapped in a bearish alignment, well below the 50-day, 100-day, and 200-day EMAs, indicating a clear long-term bearish trend, the RSI has flattened around 37, and MACD's downward momentum has calmed from extreme oversold conditions, increasing its technical rebound potential. If ETH surpasses the primary resistance of $2,138 on a daily closing basis, the recovery could extend to the 50-day EMA at $2,239 and the 100-day EMA at $2,310. However, failure to do so carries a high risk of downward pressure intensifying, potentially leading to the short-term horizontal support of $2,067 and then the previous low of $1,748.
XRP is also on the verge of breaking out of the upper boundary of its long-term descending channel, increasing the potential for a technical short squeeze. On Thursday, XRP, which recorded the $1.373 level during intraday trading, is currently tightly approaching the upper boundary of the descending wedge pattern and its primary barrier, the 50-day EMA at $1.409. Although the RSI is in bearish territory around 43 and the MACD is stuck below the zero line, indicating a high probability of profit-taking selling whenever it rises, the sentiment could reverse if a strong bullish candle breaks through both the 50-day EMA and the upper trendline of the descending channel at $1.420 on a daily basis. If this resistance wall is broken, an explosive liquidation rally could be triggered, targeting the 100-day EMA at $1.479, the long-term 200-day EMA at $1.685, and finally the $1.900 resistance zone. However, failure to hold could lead to a retreat to the psychological support level of $1.300.
In conclusion, the three major assets in the cryptocurrency market have demonstrated their downside resilience and are simultaneously standing at a critical juncture that will determine a trend reversal. Experts believe that if Bitcoin does not breach its moving average support base in the upper $76,000s, the simultaneous confirmation of Ethereum settling above $2,138 and XRP breaking out of its $1.420 channel will signal a true relief rally, completely ending the short-term downward phase for the overall cryptocurrency market.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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