BTC, ETH and XRP crash, removing $1.17 billion from the market

On December 20, 2024By Littum

Bitcoin price closes below the $100,000 support level, suggesting a further decline.
Ethereum price closes below the weekly level of $3,522, indicating a correction on the horizon.
Ripple price retests daily support level of $2.21; a firm close below would continue the ongoing pullback.

The Bitcoin (BTC) price is trading below $98,000 on Friday after falling more than 6% this week. Ethereum (ETH) and Ripple (XRP) followed in BTC’s footsteps and closed below their key supports, falling 12% and 4.5% respectively this week.

This recent price drop has triggered a wave of liquidation across the crypto market. This slump has resulted in over $1.17 billion in total liquidations in the last 24 hours and more than $238 million in BTC, $220 million in ETH, and $47 million in XRP, according to data from CoinGlass.

Liquidation chart. Source: Coinglass

Bitcoin price is poised for a decline as it closes below the $100,000 support level

Bitcoin price hit a new high of $108,353 on Tuesday and fell 7.8% over the next two days, closing below the $100,000 support level. At the time of writing on Friday, it is hovering around $97,500.

If BTC continues its correction, it could extend the decline to test the $90,000 support level again.

The Relative Strength Index (RSI) on the daily chart reads 49 below its neutral level of 50 and is pointing downward, indicating bearish momentum. The Moving Average Convergence Divergence (MACD) indicator also showed a bearish crossover on Wednesday, indicating a downtrend.

BTC/USDT Daily Chart

However, if BTC recovers and closes above $100,000, it could extend the rally to retest its all-time high (ATH) of $108,353.

Ethereum bears take off

Ethereum price faced rejection around the $4,000 level on Monday and fell 14% over the next three days to close below the weekly $3,522 level. At the time of writing on Friday, it is trading at around $3,450.

If the $3,522 level holds as resistance and ETH closes below $3,335, it would extend the pullback to retest its next daily support at $3,029.

The RSI on the daily chart is 42 below its neutral level of 50 and is pointing downward, indicating strong bearish momentum.

ETH/USDT daily chart

If ETH breaks and closes above the $3,522 level, it may extend the recovery to retest its $4,000 level.

Ripple bulls are showing signs of exhaustion

Ripple price faced rejection around the $2.66 level on Tuesday and fell 12.78% in the next two days. At the time of writing on Friday, it rejected the daily support level of $2.21 and is trading around $2.33.

If XRP closes below the $2.21 support level, it may extend the decline to test the next support level again at $1.96.

The RSI on the daily chart is reading at 57 after rejecting the overbought level of 70 on Tuesday, suggesting signs of weakness in bullish momentum. If the RSI slips below the neutral level of 50, it could signal a sharp drop in the Ripple price.

XRP/USDT Daily Chart

If XRP rises and closes above $2.66, it could extend the rally to retest the psychologically important $3.00 level.

Frequently asked questions about bitcoin, altcoins, stablecoins

Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by one person, group or entity, eliminating the need for third-party participation during financial transactions.

Altcoins are any cryptocurrency other than Bitcoin, but some also consider Ethereum 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 stablecoin is tied 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, as cryptocurrencies are generally subject to volatility.

Bitcoin dominance is the ratio of Bitcoin’s market cap to the total market cap of all cryptocurrencies combined. It gives a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, where investors resort to investing in relatively stable cryptocurrencies with high market capitalization like Bitcoin. A decline in BTC dominance usually means that investors shift their capital and/or profits to altcoins in search of higher returns, which usually triggers an explosion of altcoin rallies.