Market Update: Bitcoin at $10,000, Ripple at $1, Ethereum below $1000 as Carnage Continues
Yesterday’s China induced technical breakdown led to an unmitigated disaster in the crypto segment, as all of the majors crashed, erasing hundreds of billions of market cap in the process. The collapse of the alleged Ponzi scheme of Bitconnect added insult to injury and caused another wave of selling in late trading, driving the price of Bitcoin to $10,000, a bit earlier than expected.
BTC/USD, 4-Hour Chart Analysis
The most valuable digital currency rebounded as much as 15% after the late-session crash, but the selling pressure remained strong and today BTC briefly traded below yesterday’s low, with most of the majors holding up above the crash low.
That said, the sell-off is unlikely to be over and volatility is probably here to stay for the week, with violent swings in both directions. The coin is still likely to push lower, with a possibly lengthy bottoming phase, so a quick recovery to the record highs is unlikely, but strong support is found below $10,000 at $9200, $8200, and $7650.
Traders should be aware of the elevated risk in short-term positions here, while long-term investors could slowly accumulate positions on the sell-offs, as the coins are headed to oversold territory.
A Little Perspective
While the percentage losses are huge, and sentiment is already strongly negative in the segment, the majority of the largest coins gave back only a few weeks of gains, even if that was the most explosive part of the advance.
XRP/USDT, 4-Hour Chart Analysis
BTC hit $10,000 on November 29th, ETH traded at the current levels first two weeks ago, and even Ripple only shed the gains of less than a month with the more than 70% decline. With that in mind, calling the end of cryptocurrencies is foolish, but also a longer period of underperformance might be needed for another run-up to form in the coins, given the extent of the speculative episode of late 2017.
ETH/USD, Daily Chart Analysis
Also, as they say, where there is one cockroach there are more, so the example of Bitconnect tells us that a much-needed cleansing of the segment could be around the corner.
Stay tuned for our detailed technical analysis later on today.
Featured image from Shutterstock
Disclaimer: The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.