Fear and despair echoes across crypto markets after Terra disaster

  • Bitcoin price is stabilizing after the recent crash, hinting at a potential relief rally to $34,752.
  • Ethereum price bounces back strongly but the threat of a further crash remains.
  • Ripple price could start bleeding again if it fails to stay above the $0.509 barrier.

Bitcoin price seems to have cauterized the bleed wound after dipping below significant support levels. This brief pause in the big crypto’s downtrend has caused Ethereum, Ripple and other altcoins to rebound violently to the upside. However, things could take a quick and unfavorable turn as the LUNA-UST fiasco is still ongoing. TerraLabs’ LUNA price has crashed a whopping 93% as the UST peg becomes unstable.

Do Kwan, the creator of TerraLabs seems to have gone AWOL since his last tweet roughly nine hours ago.

Bitcoin price stabilizes for now

Bitcoin price has formed a range, extending from $29,700 to $32,627 and is yet to sweep either of the limits. Considering the recent bounce off the 79% retracement level at $30,315, BTC looks ready to sweep the range high.

In this case, BTC will rally at least 4% from the current position, allowing altcoins to explode. However, a move beyond the $33,100 will be unlikely without a proper spike in buying pressure. Assuming the bulls band together, there is a chance for the big crypto to retest the $34,752 hurdle.

This move would constitute a 10% ascent from the current position.

BTC/USD 1-hour chart

A decisive move below the range low at $29,007 without a quick recovery will indicate that the bulls are weak and invalidate the short-term bullish thesis. In such a case, BTC could sweep $28,500 to collect the liquidity formed in May and July 2021.

Ethereum price bounces back

Ethereum price has been trading below an ascending parallel channel since its breakout on May 6. So far, ETH has crashed 20% and tagged the $2,199 support level. Now the bounce off this barrier seems to be coming along well.

The resulting upswing could propel ETH to the $2,541 resistance barrier, which is where the upside is likely to be capped. Investors need to be cautious as the Bitcoin price could crash lower, taking altcoins down with it.
ETH/USD 3-day chart

ETH/USD 3-day chart

If Ethereum price recovers above the $2,541 barrier, however, and produces a day candlestick close above $3,703, it will create a higher high and invalidate the bearish thesis.

Ripple price remains strong

XRP price has swept below the range low at $0.509 to collect the sell-stop liquidity resting below the equal lows formed in June and July 2021. Due to the liquidity purge, the relief rally has propelled Ripple to recover above the $0.509 barrier quickly.

As long as XRP price stays above the aforementioned level, there is a chance of a 16% uptrend to propel it to the immediate hurdle at $0.596. Like many altcoins, the upside is likely to be capped for Ripple around this level due to the uncertain nature of the market.

XRP/USDT 1-day chart

XRP/USDT 1-day chart

On the other hand, if the XRP price produces a daily candlestick close below $0.509, without a quick recovery, it will indicate that sellers are in control. In such a case, the bullish thesis for Ripple will face invalidation, potentially triggering a further crash to $0.401.