Bitcoin faces a potential downside if it falls below the $56,000 mark

• Bitcoin price hovers around key support level at $56,000; a close lower could see its downtrend persist.
• Ethereum Price Approaches $2,300 Level; a firm close below would suggest a decline ahead.
• Ripple price is hovering around its daily support level at $0.544, with a break below signaling a bearish trend ahead.

Bitcoin (BTC) and Ripple (XRP) prices are approaching key support levels, a close below these levels could signal a decline ahead. Ethereum (ETH) is also following a similar trajectory, with a breach of the $2,300 level potentially forecasting a bearish trend.

Bitcoin price is poised for a decline if it closes below the $56,000 support level

Bitcoin was rejected after retesting its 50% price retracement level at $59,560 (drawn from a late July high to an early August low) on Monday and fell 5% over the next three days. As of Friday, it is trading slightly higher by 1% at $56,740 after retesting the daily support level around $56,022.

If BTC closes below the daily support level of $56,022, it could drop 3.5% to retest the psychological level of $54,000.

The Relative Strength Index (RSI) and the Awesome Oscillator (AO) momentum indicator on the daily chart are trading below their respective neutral levels of 50 and zero, respectively. Both indicators suggest weak momentum and a continuation of its downtrend.

BTC/USDT Daily Chart

However, if Bitcoin price breaks the $59,560 resistance and closes above $62,019, the 61.8% Fibonacci retracement level, the bearish thesis will be invalidated. In this scenario, BTC could extend the positive move by 5.5% to revise its daily resistance level at $65,379.

Ethereum price is set for a downtrend after closing below the $2,300 level

Ethereum price bounced back around the previously broken uptrend line (formed by connecting multiple August 7 lows), which was around $2,619 on Monday. It fell 7% over the next three days, finding support around its August 8 low of $2,327. Since Friday, it is trading slightly higher by 1.35% at $2,400.

If ETH closes below the $2,327 level, it could drop 8.5% to retest the weekly support at $2,118.

The RSI and AO are trading below the neutral 50 and zero levels on the daily chart. These momentum indicators signal continued bearish dominance and imminent price declines on the horizon.

ETH/USDT Daily Chart

On the other hand, if ETH breaks above the $2,619 level and closes above the daily resistance at $2,927, forming a higher high on the daily chart, this would invalidate the bearish thesis and could rise 11% to retest the level weekly resistance at $3,236.

Ripple price is poised for a drop after closing below the key support level

Ripple price broke below the 200-day EMA, hovering around $0.549 on Thursday, but found support around the daily support level at $0.544. It is trading slightly higher by 0.46% at $0.546 on Friday. If XRP breaks below the $0.544 level, it could drop 10% to retest the August 7 low of $0.492.

The daily chart’s RSI and AO are trading below the neutral 50 and zero levels. These momentum indicators strongly point to bearish dominance.

XRP/USDT Daily Chart

However, if Ripple price closes above the daily resistance level of $0.626, it would change the structure of the market by creating a higher high on the daily chart, which may lead to a 5.3% increase to revise the high of 31 July of $0.658.