• Bitcoin price hovers around $89,000 on Wednesday after recovering nearly 3% so far this week.
• Ethereum is nearing the key 50-day EMA at $3,101, a firm close above suggests an upside move.
• XRP rebounds after finding support around the daily level at $1.83.

Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) are extending their recovery so far this week after a massive correction last week. BTC trades above $89,000, ETH above $3,000 and XRP above $1.90. These top three cryptocurrencies by market capitalization are nearing key resistance; a firm close could extend the near-term recovery.

Bitcoin could extend its recovery if the key support holds

Bitcoin price recovered slightly, closing above the midpoint of a horizontal parallel channel at $87,787 on Monday, after a 7.48% correction last week. BTC continued its recovery on Tuesday, finding support around the midpoint level. At the time of writing on Wednesday, BTC is trading at $89,300.

If the $87,787 continues to hold as support, BTC could extend the rally toward the upper boundary of the horizontal pattern at $90,000.

The Relative Strength Index (RSI) on the daily chart is 45, pointing upward toward the neutral 50 level, indicating fading bearish momentum. For the recovery rally to be sustained, the RSI must move above the neutral level. In addition, the Moving Average Convergence Divergence (MACD) lines are converging, with fading red histogram levels below the zero line, further supporting the potential recovery thesis.

On the other hand, if BTC closes below the $87,787 support on a daily basis, it could extend the fall toward the lower consolidation boundary at $85,569, which coincides with the 78.6% Fibonacci retracement level.

Ethereum nears key resistance zone

Ethereum price started the week on a positive note, recovering 7.62% by Tuesday after a massive 14.22% correction the previous week. As of Wednesday, ETH is nearing the key resistance level at $3,017.

If ETH breaks above the daily resistance at $3,017 and closes above the 50-day Exponential Moving Average (EMA) at $3,101 on a daily basis, it could extend the rally toward the January 14 high at $3,402.

Like Bitcoin, the RSI and MACD indicators show fading bearish momentum, suggesting a potential near-term recovery.

However, if ETH faces a correction, it could extend the decline toward the 61.8% Fibonacci retracement level at $2,749.

XRP rebounds after finding support around the $1.83 daily level

XRP price retested and found support at the daily level of $1.83 on Sunday, and recovered 4.51% over the next two days. At the time of writing on Wednesday, XRP is trading at $1.90.

If the daily level at $1.83 continues to hold as support, XRP could extend the recovery toward the next daily resistance at $1.96.

However, the RSI on the daily chart is 42, below the neutral 50 level, indicating bearish momentum. For the recovery to be sustained, the RSI must move above the neutral 50 level. Traders should remain cautious, as the MACD showed a bearish crossover last week and has remained intact, suggesting a downward move.

Conversely, if XRP closes below the daily support at $1.83, it could extend the decline toward the December 19 low of $1.77.