Bitcoin (BTC/USD) Limps as Ripple (XRP/USD) Eyes Further Gains

BITCOIN, RIPPLE (XRP) KEY POINTS:

• Bitcoin Prices Struggle as Low Volatility and the DXY Hamper Recovery.
• Cryptocurrency Exchange Volumes on Course for Lowest Month Since October 2020.
• Should Recent Speculation Prove True, A Resolution on the SEC/Ripple Case Could See XRP/USD Rally Toward the 0.8000 Mark.

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Bitcoin has struggled to maintain last week’s gains as a host of external pressures weigh on the world’s largest cryptocurrency. The obvious factor being US Dollar strength continuing despite an agreement on the US debt ceiling as hawkish Federal Reserve rhetoric and strong US data has resulted in rate hike bets being repriced on the hawkish side.

This did not seem to faze BTC/USD last week; however, this morning’s selloff came as comments from Fed official Loretta Mester were published in the Financial Times. Mester stated that she saw no reason for a pause right now with a compelling case for further hikes and then potentially holding them there until the economic picture is clearer. Similar comments were made by Bank of England Governor Bailey last month who stated that the economic picture remains uncertain which makes forecasting a particular challenge moving forward.

Despite a poor month of May it is important to maintain a sense of perspective. Keeping track of performance over the past 90 days and Bitcoin remains up around 14.5% from its February close. The tweet below from Glassnode shows Bitcoins performance over the past 90 days in comparison to WTI, Gold and Silver.

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Ripple on the other hand has seen a revival of late as unconfirmed reports have begun circulating that the Securities and Exchange Commission (SEC) case against Ripple could be settled in the coming weeks. The news is no doubt partly responsible for Ripples recent recovery putting it on course for a monthly gain around 8% (at the time of writing). Quite impressive given a week ago Ripple traded flat for the month around the 0.4560 mark.

The crypto fear and greed index itself is in neutral territory at present compared to the overall fear and greed index which is currently languishing in greed territory.

Another sign of the current environment lays in the cryptocurrency exchange volumes which are on course for their lowest monthly level since October 2020.

TECHNICAL OUTLOOK AND FINAL THOUGHTS

From a technical standpoint BTCUSD has just tapped into the 100-day MA below the 27000.00 mark. Given the reaction we saw on Monday when price taped the 50-day MA I am hoping for some form of bounce off the 100-day MA back toward the 28000.00 mark and potentially the top of the current channel.

Alternatively, a daily candle close below the 100-day MA could see a retest of the bottom f the channel and potentially the psychological 25000.00 level.

BTCUSD Daily Chart, May 31, 2023.

Source: TradingView, chart prepared by Zain Vawda

Ripple (XRP/USD) on the other hand and we can see the continuation of the upside rally this week before today’s pullback. A daily candle close above immediate resistance around the 0.5500 mark has the potential to lead to an extended rally. We have little in the way of resistance above 0.5500 all the way up to 0.8000. Such a move would represent a 44% appreciation in value for XRP/USD and could be well worth keeping an eye on.

XRPUSD Daily Chart, May 31, 2023.

Source: TradingView, chart prepared by Zain Vawda

— Written by Zain Vawda for DailyFX.com

Contact and follow Zain on Twitter: @zvawda