Is Bitcoin Price Able To Rebound?

This morning, Bitcoin price, Ethereum and other cryptocurrencies look to be deviating from global markets after the third recession warning on Wednesday.

With commodities still facing selloffs on Thursday and stock markets maintaining mixed performance, cryptocurrencies look to break the trend and shed the weight of the correlation with global market trends. Expect to see possible further decompression, with some gains in the books as cryptocurrencies are looking for the nearest upside price caps.

Bitcoin price sees positive signals from the Relative Strength Index emerging, as a diversion between cryptocurrencies and global markets is underway. Within the market diversion, correlations get broken, and cryptocurrencies create room to rally higher.

For Bitcoin, this could mean that the RSI would trade toward at least the 50-area and look for equilibrium before the correlation with global markets could kick in again. Bitcoin price is maneuvering to pare back some losses and look for a cap.

Once the $22,000 significant level is broken, another leg higher would be set for a test on $23,878.62. That level goes back to the falling knife price action from May 12 and coincides with the monthly S1 support level, making it a double cap to break through.

The risk with this market diversion is that a massive correction could unfold when the correlation kicks back in. The US dollar this morning is rallying firmly, but that repricing is not being fed through the Bitcoin price action. Once that correlation gets back in line, expect a drop towards $18,000 and BITCOIN price to be on the brink of printing new lows for 2022.

Ethereum price shows the same diversion mentioned above with Bitcoin price action. Although markets in other asset classes are still moving in the same direction, cryptocurrency traders feel that there has not been enough decompression yet for the price action. In this case, for Ethereum, the price action needs to pair back some more losses before bulls have closed enough positions for bears to run price action back down.

With limited upside potential in this time frame, ETH price could see little interest from traders against Bitcoin and XRP, attracting more cash inflow. That could be seen by rejection at $1,243.89 and a complete sell-off in the price action towards $930 at the monthly S2. That would mean another 25% losses added and ETH price flirting with new lows.

Ripple price sees from the RSI that bulls have already pre-positioned for a leg higher and the only way is up. Expect to see momentum building for a breakout trade towards $0.3710. If this market diversion window has some more legs, the rally could be sustained towards $0.4228.

Ripple price has thus two scenarios in front of it to choose from, with the initial target at $0.3710 holding 15% gains, and the second one at $0.4228 which would trigger 30% of returns. A weaker US dollar could make the second scenario materialize depending on the supportive elements from global markets. In contrast, in case dollar strength persists, only the first target would get reached. Checking on the market diversion will be key to figure out whether the background elements align.