Bounce

• Bearish Bitcoin pattern
• Shiba Inu’s symmetrical pattern

The most recent price movement of XRP is more indicative of a traditional dead cat bounce than a long-term recovery. Momentum vanished nearly as fast as it had appeared, and the asset was unable to produce significant continuation after momentarily regaining ground above $3.00. It is now clear to traders who were anticipating a breakout that the rally was brief, leaving XRP vulnerable to additional declines. The weakness is clearly visible on the daily chart.

At first, the 100-day EMA supported XRP’s attempt to recover from the $2.80 support zone. But almost instantly, selling pressure returned to the 50-day EMA, where price action stalled. Because of the rejection, XRP is now trading below important moving averages, and the 26-day EMA is not offering any significant support. In the absence of a robust catalyst or fresh buying interest, the setup is strongly biased toward bearish continuation.

XRP/USDT Chart by TradingView

Volume supports the notion that there was little participation in the rally, because the rebound coincided with a drop in trading activity. In the absence of volume expansion, breakouts are rarely sustained. This dynamic demonstrates that the most recent upward push was not the beginning of a new bullish wave but rather a technical relief move.

Indicators of momentum like the RSI provide more proof. The RSI rapidly retreated after rising slightly during the bounce, indicating waning strength. Although it is currently trending lower and hovering around neutral territory, the indicator suggests that there may be fresh selling pressure coming soon.

There is currently a chance that XRP will retest the $2.75 support level, a break below which would allow for further declines toward $2.45. For XRP to regain its bullish momentum, it would require a clear move above $3.10 and consistent buying volume — neither of which appears likely at this time.

Bearish Bitcoin pattern

The classic Three Black Crows candlestick pattern has formed on the daily chart, giving Bitcoin’s price action a more bearish outlook. Three long red candles that close lower than the one before them indicate a strong bearish reversal, and this formation frequently comes before sustained downward momentum. 

This change begs the question of whether Bitcoin’s recent push to its all-time high has already slowed. Conditions for Bitcoin remain favorable on a macro level. An environment that is typically favorable to riskier assets and liquidity expansion was made possible by Powell’s dovish stance and the anticipation of rate cuts in September. However, Bitcoin’s chart’s microstructure conveys a different message. The Three Black Crows indicate strong selling pressure and insufficient buying volume to offset it.

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For short-term investors, this discrepancy between macro optimism and micro weakness may be a warning sign. The graph shows a clear breakdown from the $116,500 area, where Bitcoin was unable to recover the 50-day EMA. As a thin line of defense, the coin instead moved toward the 100-day EMA around $110,800. The next significant support is located around $104,000, which would indicate a more profound correction if this level were to give way. 

The bearish scenario is further supported by volume as diminishing inflows imply that new money is not joining the market and that liquidity is still precarious. This means that even though the overall financial climate seems accommodating, Bitcoin is extremely susceptible to additional downside shocks. For the time being, traders of Bitcoin should keep a careful eye on the support zones at $110,800 and $104,000.

A robust recovery could reverse the bearish setup, but if these levels are not maintained the correction period could be prolonged. The Three Black Crows may be the most powerful confirmation to date that Bitcoin’s short-term momentum has clearly moved into bearish territory, even though the long-term fundamentals are still in place. 

Shiba Inu’s symmetrical pattern

Shiba Inu is trading close to the lower edge of a symmetrical triangle pattern that has been forming for months, placing the company at another pivotal point. This pivotal level is crucial because a break below the rising support line might cause a precipitous decline in price, which might drive SHIB down to the $0.00001150 region or lower. Both bulls and bears have failed to take control of the market, as indicated by the symmetrical triangle. SHIB’s present position at the lower boundary, however, indicates that buyer strength is waning. The pattern will probably resolve to the downside and feed bearish sentiment if support breaks.

Lack of volume is among the most concerning signals. When there is a healthy breakout, whether it is bullish or bearish, trading activity typically spikes. Trading volume has been declining for SHIB, which suggests that investor interest is waning. The likelihood of a bullish breakout above the upper triangle resistance is low in the absence of significant inflows.

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Momentum is also uninspired. The lack of strong buying conviction is reflected in the RSI’s downward trend, which is currently hovering around neutral territory. The indication suggests that there may be more weakness ahead, even though the market is not yet in oversold territory.

Bulls must vigorously defend the triangle’s lower boundary and drive the price back toward the $0.00001300-$0.00001400 range if they want SHIB to reverse the trend. A clear breakout above the upper resistance line, which is currently at around $0.00001450, would be necessary to validate a reversal and pave the way for higher levels.

SHIB’s time and space are running out because the symmetrical triangle pattern has become much smaller. The asset may see accelerated losses in the upcoming sessions if bulls do not act now.

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