The cryptocurrency market has opened the week's trading in substantial losses. The market is mainly painted red after Bitcoin pulled the majority of cryptocurrencies down. BTC slumped from price levels above $40,000 to an intraday low of around $32,000.

Altcoins appear to have suffered the most, as Ethereum's 20% loss in 24 hours shows. Ripple was not spared the axe as it sliced through the support at $0.3 and retested the buyer congestion at $0.26. Litecoin bulls are also gasping for air downstream after losing over 20% of its value. The rest of the losses in the market are double-digit losses, as highlighted by CoinMarketCap.

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Bitcoin recovery depends on this crucial short-term support

The bellwether cryptocurrency revisited lower price levels marginally above $32,000 on Monday during the Asian session. The hunt for a local bottom occurred after overhead pressure increased under the new all-time high of around $42,200. Various tentative support levels did little to stop the losses including $40,000, $37,500 and $35,500.

On testing the buyer congestion at $32,000, Bitcoin had a reflex rebound above $35,000. Meanwhile, the price is teetering at $35,450 while bulls fight to shake off the bearish pressure. A downward sloping Relative Strength Index seems to have reinforced the bearish grip.

However, closing the day above the immediate support at $35,000 would call for stability while encouraging more buyers to join the market (due to lower prices). Enough volume/tailwind must be created behind BTC to support a sustained recovery back to levels beyond $40,000.

As observed on the 4-hour chart, the trend is generally in the bulls' hands based on the price trading above the three moving averages; the 50 SMA, 100 SMA and 200 SMA. Recovery lacks a catalyst to complete the leg up to $40,000.

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BTC/USD 4-hour chart

If support at $35,000 caves, we can expect overhead pressure to increase significantly. Similarly, panic selling might grip the market if the daily support two at $32,000 is broken, while the bearish leg would have the potential to revisit support three at $30,000.

Ethereum fights to stay above $1,000

The flagship altcoin recently reached a new yearly high at $1,353 but was negatively impacted by the BTC slump to $32,000. Thus Ether retested support at $1,000, allowing bulls to avert losses to $900.

Ethereum is trading at $1,085 while fighting tooth and nail to reclaim the position above two key levels: $1,000 and the 50 SMA. Currently, the trend appears to favor the bulls as the RSI on the 4-hour chart reverses its motion above the oversold area.

A daily close above the above-mentioned critical levels may see Ethereum embark on the journey back to the yearly high. The move will also increase investor confidence in the token's ability to recover despite massive retracements.

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ETH/USD 4-hour chart

On the flip side, Ethereum is not out of the woods yet because closing the day under $1,100 could increase the overhead pressure on the support at $1,000. If losses continue under this critical zone, the price may retest the next anchor at the 100 SMA, marginally above $900. Besides, the primary support lies at $700, but the 200 SMA may absorb some of the selling pressure around $770.

Ripple recovery in the offing

Ripple has suffered dearly in the recent crypto market retracement. From a yearly high of $0.3715, it tested $0.25. The 100 SMA aided in absorbing the selling pressure. Meanwhile, XRP is doddering at $0.285 while immediately supported by the 50 SMA on the 4-hour chart.

Trading past $0.3 remains the bulls' short-term priority. The price action will allow them to shift the focus back to $0.4 and $0.5, respectively. On the other hand, the ongoing recovery appears to have been reinforced by the RSI.

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XRP/USD 4-hour chart

It is worth noting that the bullish outlook will be invalidated if XRP made a daily close under the 50 SMA or the 100 SMA. Support at $0.25 may also be retested and, if broken, the down leg will extend to $0.20.