Bitcoin’s recent rise may initially appear like a robust recovery, but technical indicators suggest it could be a “false breakout” rather than a permanent reversal. Despite overcoming short-term resistances and reclaiming some moving averages, Bitcoin’s momentum waned upon reaching the dense technical zone formed by the 100 and 200 exponential moving averages (EMA). This indicates the market remains cautious, with buyers reluctant to commit at higher levels. Meanwhile, Shiba Inu and XRP have yet to test similar resistances, pointing to a potential trial for the crypto market in the coming days.
Why Bitcoin’s Recovery Attempt Lacks Confidence
A genuine trend reversal in Bitcoin is typically marked by overcoming resistances on strong volume or a continuation of upward movement following a brief pause. However, the latest surge in Bitcoin saw hesitancy quickly set in after an initial spike in momentum. The increase in volume was short-lived and tapered off quickly. This suggests that recent market activity was more about short-covering and luring late buyers than genuine spot accumulation.
More importantly, Bitcoin remains in a broad correction phase. The 200 EMA turning downward rather than stabilizing clearly shows a weakening long-term trend. Unless this level is reclaimed, every attempt at a rise should be viewed with skepticism. Current price actions resemble a relief rally within the main downtrend more than the start of a new uptrend. Momentum indicators, like RSI, also point to a mechanical reaction following overselling, rather than signaling a strong trend reversal.
Technical Pressure Continues on SHIB and XRP
Shiba Inu approaches the 100-day EMA for the third time, reaching a critical junction. After months of decline, the easing selling pressure and price compression within a narrow range could pave the way for directional movement. Although previous attempts failed, decreased volatility and quicker buyer engagement suggest the technical structure is partially improving. However, if consolidation above the 100 EMA isn’t achieved, SHIB might enter a sideways and exhaustive phase.
XRP presents a weaker outlook. Forming three local waves within a descending channel indicates that buyers remain defensive. Each recovery has been weaker than the last, as the 50 and 100 EMAs impose downward pressure, keeping the bearish trend intact. A true recovery for XRP requires breaking this channel and reclaiming key moving averages.
Adding to the complexity, global market uncertainties related to the U.S. Federal Reserve’s interest rate policy and volatile fund flows into spot Bitcoin ETFs weigh heavily on crypto assets. The recent slowdown in ETF inflows emerges as a significant factor explaining the lack of sustained gains.