Top 3 Price Prediction Bitcoin, Ethereum, XRP: False selling pressure to trigger new crypto uptrend

  • Bitcoin price action continues to drop towards the $40,000 value area, but conviction is lacking.
  • Ethereum price generates bear trap below bull flag pattern.
  • XRP price action finds buyers and rejects further selling pressure.

Bitcoin price has developed one of the most obvious head-and-shoulders patterns on its daily chart, generating many new short positions before confirmation of the pattern is complete. Likewise, Ethereum price has seen many new short positions generated after dropping below its bull flag. XRP price action is playing catchup with BTC and ETH as buyers begin to trickle in.

Bitcoin price prepared for a massive short squeeze

Bitcoin price action has certainly been on the downswing of late. Since last week's open, Bitcoin has dropped more than 20%. Fear is the emotion affecting most retail traders.

However, the drop for Bitcoin has been almost textbook in its positioning and timing. Little follow-through selling occurred as Bitcoin price dropped below the December 10 flash-crash low. A short squeeze setup has developed on the $1,000/3-box reversal Point and Figure chart.

The hypothetical long entry is a buy stop order at the 3-box reversal, currently at $45,000 with a stop loss at $41,000 and a profit target at $60,000. The trade idea represents a 3.75:1 reward/risk setup with an implied profit target of nearly 35% from the entry. A two-box trailing stop would help protect any profit made post entry.

BTC/USD $1,000/3-box Reversal Point and Figure Chart

There is no invalidation point for the hypothetical long entry. If Bitcoin price moves lower, the entry and stop-loss follow in tandem, but the profit target at $60,000 remains the same.

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