The SEC’s lawsuit against Ripple may be bearish for a few altcoins but could be bullish for Bitcoin.
The current crypto bull run has been spearheaded by Bitcoin (BTC). As the United States Securities and Exchange Commission has previously hinted that Bitcoin is not a security, the regulator’s current lawsuit against Ripple is unlikely to stop the institutional inflow of money into Bitcoin.
However, a few altcoins that may be at risk of facing a similar fate as Ripple could face selling pressure. Due to a change in sentiment, retail investors may sell some of their altcoin holdings and shift to Bitcoin.
Even retail investors who plan to spend their stimulus checks for buying crypto-assets may prefer Bitcoin over altcoins. So, while XRP faces selling pressure, the lawsuit may prove to be bullish for Bitcoin.
The institutions have been pumping money into Bitcoin at an unprecedented pace. Grayscale continued its buying spree and added 12,319 Bitcoin on Tuesday. That means Grayscale gobbled up about 44% of all the newly mined BTC in a month or around 28,000 Bitcoin.
Bitcoin’s supply is not able to keep up with the institutional demand and if retail traders also turn net buyers, the price is only likely to boost further.
Let’s look at the charts of the top-10 cryptocurrencies and establish their major trend.
In a strong uptrend, the corrections usually last for about one to three days. Bitcoin closed in the red on Dec. 20 and 21 but the price turned up on Dec. 22 and the bulls are currently attempting to resume the up-move.
If the bulls can push the price above $24,302.50, the BTC/USD pair could rally to $26,958. The upsloping moving averages and the relative strength index (RSI) close to the overbought zone suggest bulls are in control.
However, if the bears defend the overhead resistance level, the pair may consolidate in a tight range of $21,934.83 to $24,302.50 before starting the next move.
Contrary to this bullish assumption, if the pair turns down and breaks below $21,934.83, a drop to $20,000 is possible. The zone between $19,500 and $20,000 is crucial because if it cracks, the pair may drop to the 50-day simple moving average ($18,529).
The bulls are aggressively defending the 20-day exponential moving average ($603). Although Ether (ETH) rose above the $622.807 resistance on Dec. 22, the price has turned down once again today. This suggests that demand dries up at higher levels.
However, the bulls are currently attempting to defend the 20-day EMA. If they succeed, the ETH/USD pair could make one more attempt to rise above $640 and retest $676.325.
The upsloping moving averages and the RSI in the positive territory suggest that bulls have the upper hand. A breakout of $676.325 may start the next leg of the uptrend, which has a target objective at $763.614.
Conversely, if the price dips below the trendline of the triangle, the pair could extend the decline to $540 and then to $480.