Crypto Today: Why are Bitcoin, Ethereum and XRP extending gains as US Dollar falls on Democrats' US midterm win?

• Bitcoin rebounds past $78,000, while the Democrats’ US midterm lead sends the US Dollar to its lowest in five weeks.
• Renewed risk appetite lifts Ethereum on Wednesday, with traders positioned marginally above the 200-day EMA.
• With XRP holding above $1.28, bulls target a near-term break past $1.30.

Improving risk appetite across the cryptocurrency market supports Bitcoin (BTC) above $78,000 on Wednesday. Following BTC’s recovery outlook, Ethereum (ETH) hovers above $2,300. Ripple (XRP) also holds above $1.28, extending its gains to two successive days.

How are US midterm elections supporting the crypto recovery?

Cryptocurrencies are recovering broadly as Democrats notch up successive wins in the United States (US) midterm elections and advance towards control of the House. An NBC News report says the party has substantially exceeded its 2024 margins, making deep inroads into Republican territory.

Pressure from the midterm results has left the US Dollar Index (DXY) trading at 101.41, a decline of 0.45% on the day. The fall puts the index in line with a six-month low, indicating market concern over the election outcome.
Sponsored by Republican lawmakers, the US CLARITY Act did not clear the Senate. The likelihood of the bill becoming law could fall considerably with a Democratic majority in the House.

In Tuesday’s ‘Ahead of the Curve’ report, K33 Research analysts said, “Today, the US midterm elections could trigger substantial volatility, with prediction markets assigning a 71% probability to Democrats winning both chambers,” and added, “This combination of thin liquidity and elevated leverage increases the risk of sharp price swings once market activity picks up following the election.”

Technical analysis: Can Bitcoin sustain its recovery momentum?

A near-term bullish bias remains in place for Bitcoin at $78,448, supported by its position above the 100-day and 200-day Exponential Moving Averages (EMAs) of $77,806 and $76,558. Rising trendline support stretching from $71,126 to $75,650 also underpins the price. Nevertheless, the 50-day EMA at $80,067 and the SuperTrend line at $82,920 continue to cap the pair, suggesting consolidation within the prevailing uptrend.

With the Relative Strength Index (RSI) around 43 and the Moving Average Convergence Divergence (MACD) below zero, momentum signals remain cautious. Further gains could therefore develop gradually, even as the broader price structure retains support.

The 50-day EMA at $80,067 presents the nearest resistance, ahead of the SuperTrend hurdle at $82,920. Below current levels, the recent pivot region around $78,448 provides the first notable support area. Stronger demand sits along the short-term ascending trendline at $75,650, while the earlier trendline near $71,126 offers deeper structural support. Adding to these support layers are the 100-day and 200-day EMAs at $77,806 and $76,558. The broader bullish structure remains intact as long as the price holds above these averages.

Ethereum technical analysis: Can ETH stage a near-term recovery?

Despite trading just above the 200-day EMA of $2,313, Ethereum retains a bearish near-term bias at $2,318, with the 100-day EMA at $2,350 limiting gains. Higher up, the 50-day EMA at $2,407 and the SuperTrend line at $2,490 add further layers of resistance. Although the MACD has moved into positive territory above zero, an RSI reading of 43 continues to signal muted momentum.

The first upside hurdle is the 100-day EMA around $2,350, ahead of the 50-day EMA near $2,407 and the more substantial SuperTrend barrier around $2,490. Immediate downside support, meanwhile, rests at the 200-day EMA near $2,313. A lasting breach of this base would likely open the way to lower levels again. To reduce the prevailing bearish bias, ETH would need a daily close back above the cluster of moving-average resistance levels.

Technical analysis: Can returning bulls extend XRP’s gains?

Trading below its key moving averages, XRP retains a bearish short-term bias at $1.28. The 100-day EMA of $1.32 and the 50-day EMA of $1.34 constrain the price, with the 200-day EMA at $1.37 adding to overhead supply. Spot prices also sit below the Bollinger middle band of $1.29, signalling a downside bias. A marginally positive MACD and a neutral RSI around 43 suggest that recovery potential remains limited for now.

The Bollinger middle band around $1.29 is the first resistance level, ahead of the 100-day EMA at $1.32 and the 50-day EMA at $1.34. Should buyers pursue a stronger recovery, the Bollinger upper band at $1.36 and the 200-day EMA at $1.37 define a wider supply zone. On the downside, the Bollinger lower band near $1.23 provides immediate structural support. Losing this level would likely set the stage for a deeper correction; retaining it leaves scope for a corrective rebound within the broader bearish structure.

(The technical analysis of this story was written with the help of an AI tool. Know more.)