Today is Wednesday, 22nd September, and this is Cointribune’s Crypto analytics. You will learn about everything that’s been going in the market, and also what to expect next in our new article! If you’d like to read the previous instalment, please follow the link. Off we go!
Today is Wednesday, and the crypto rollercoaster just won’t stop. Not that this hasn’t happened before, but watching altcoins take decisive steps towards recovery and Bitcoin suddenly fall and nullify all their achievements is quite depressing.
Tuesday ended with BTC dropping below $40,000. At the moment, the coin has reached the $39,500 mark, thus driving the bulls to buy. The new day started with a solid green candlestick, and as of this writing, the first cryptocurrency is trading near $42,200.
At this stage, Bitcoin is moving within the local downward channel. Its upper border is dictated by two highs left after unsuccessful attempts to break through the resistance. The asset can still go lower, below the support indicated by the new trading range. However, we are already halfway to the border of the global triangle, which should become the offset point for changing the local trend to bullish and starting a new ascent.
At the same time, the crisis of Evergrande, China’s largest real estate developer, can still seriously impact the behaviour of BTC. If the authorities of the Celestial Empire don’t try or don’t manage to save the company $300 billion in debt from default, then that will be a serious blow to both the stock and the crypto markets.
In general, the unfolding of these events is very interesting to observe. At the time when BTC was supposed to break higher but simply did not have enough strength, which it was slowly accumulating towards support – it was quite brutally forced down by the appearance of fake news. It seems like the whales already knew about the upcoming difficulties, and therefore have begun to sell their assets (hence the first sudden dumps of BTC). This also explains the lack of strength in Bitcoin to move any higher. Large BTC buyers are simply biding their time outside the market since it’s not profitable for them to spend money fighting a trend that, in theory, could allow them to gain new positions in BTC much cheaper.
It’s doubtable that the Evergrande story will turn out badly. After all, we are talking about one of the largest companies in China, and it’s in everyone’s best interest to save such companies. Not because it’s a dying business, but because crises for companies that size always hit markets first, dealing heavy damage to other businesses as well. Doing nothing would jeopardize the stability of the entire economy.
Thus, we can say with confidence that soon, these crypto rollercoasters will end. As soon as the situation with Evergrande stabilizes and some statements about support measures are issued – the markets, including ours, will immediately react with solid growth. Therefore, it’s advisable to buy now and to buy some more in case of a dip, since these are the most optimal entry points at this stage.
The current movement is still fully in line with the global bullish picture. We are still operating within a triangle whose key element is the “bullish wedge”. Consolidation (accumulation) is an invariable factor in this pattern, which we can also observe on higher time frames. Visually, it looks like a series of green and red candles on the chart, forming towards the upper and lower walls of a narrowing trading range. Instead of two parallel lines, we have two walls (same lines) moving in the same direction, but showing a clear tendency of convergence.
In the big picture, the situation has not changed for Bitcoin. We are still in accumulation, and in case there is a drop, you can take advantage of it. The first key support region is at $40,000, which is also an important psychological level. The next one is $35,000, which acts as a support within the triangle pattern. The next stop on the potential move down is the area around the $30,000 mark, which is the upper border of the expanding descending trading channel (yellow). And the last one is $20,000, acting as the lower border of the downward purple trading range. Only in case it goes any lower than that could we start talking about the possibility of a crypto winter.
There is no growth without corrections. So you shouldn’t view a mere drop in price as the beginning of the coin’s imminent downfall. Even bulls need to take profits. The idea is that when the price goes lower, you can buy even more assets with the money earned to keep them until the growth dynamics allows you to count on the best.
The current fall of Bitcoin is merely an instance of venting an overheated market and redistributing forces within the triangle. After BTC regains its strength, it will continue to climb and will likely approach the former peak by the end of this year or even set a new, absolute price maximum.
It’s time to invest. Another more profitable chance to enter the market may not appear for a very long time.
UPDATE: Evergrande has said it would make a coupon payment on its domestic bonds on schedule. That means the Chinese authorities will pay the bondholders and nationalize Evergrande. There will be no crisis. We are waiting for the rise in prices.
A picture similar to that of BTC also appears on the Ethereum chart. The second-largest cryptocurrency has given up on the idea of acting independently and continues to mirror Bitcoin’s movements.
As of this writing, the asset is trading near $2,900. At one point, ETH even reached $2650. However, it then quickly bounced back.
The largest altcoin is halfway to the bottom of the triangle. With a bit of luck and no bad news on the horizon, there’s a high chance that the asset will soon begin to grow.
On the other hand, to change the trend to positive it would only take some news about the Chinese authorities providing financial support to Evergrande. In case such news appears soon, BTC and ETH will not even need to reach support within the triangle.
If you consider investing in ETH, now is the time, but be prepared for pullbacks. Only in that case will you be able to make profits.
And here comes the extreme fear! Retail players are getting rid of their positions and aren’t willing to risk opening new ones. It’s the time when the pendulum loses its momentum and could use another swing.
The last time we hit this kind of fear, the market sharply reversed and then went up again. This is because the whales who had bought your assets during the dump had had enough and began to push the price higher, provoking new users to purchase. When retail investors start to buy in a low-pressure bearish environment, the prices go up dramatically, pushing the value of the assets acquired by the whales up.
That’s the way of the crypto world. By hook or by crook, by sales and news, retail investors are first forced to put up with losses and then provoked to make new purchases. Those wrongly believing that the crypto winter is coming and can’t hold or choose not to buy their assets during a dump, still end up acting in a way that’s beneficial to the whales. To prevent that from happening, you need to be able to see the big picture and not be afraid to buy when everyone else has already lost hope.
The top altcoins are still red. However, their losses are not as significant as they could be. This is a great chance to buy top-end crypto assets at bargain prices.
Binance Coin (BNB) is currently changing hands at $500, which means that during the recovery, you can make good money on it. The same is true for Solana (SOL).
XinFin (XDC) becomes the gainer of the day. Over the past day, this asset has brought its holders about 17%. The coin itself is moving within a downward local channel, but globally it is at support. If the upper border of the white range is breached then it would be worth waiting for a pump.
Ironically, yesterday’s gainer is today’s loser. We are talking about OMG Network (OMG), which brought its holders more than 17% of losses. The situation is twofold. On the one hand, the asset is trying to draw a cup and handle, which implies an ascent to the last high. But at the same time, it’s moving within an ascending triangle, meaning that it can only leave it with a downward red candle. It all depends on how quickly the crypto market begins to recover.
While this article was in writing, some good news about Evergrande came up. It is now confirmed that the current collapse is linked to the Evergrande predicament. The news appeared following the shift of the fear and greed index towards extreme fear, which is usually a starting point for serious changes in the market.
The news about Evergrande will only have an effect for the next couple of days. So right now is possibly the last chance to buy crypto at the best price at this time. That doesn’t imply that the BTC crisis is over, however. The shift towards $40,000, the extreme fear, and the good news that should motivate people to be more willing to buy – it all looks like a well-balanced plan that’s approaching its final stage. The pendulum has just got its long-awaited swing.
Don’t forget about stop losses and don’t neglect risk management.
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
|BITCOIN (BTCUSD) ₿||$64,322.88||0.13%|
|ETHEREUM (ETHUSD) Ξ||$3,942.12||1.65%|
|IMM. US (REIT)||$2,674.50||0.07%|
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