It’s Saturday, 11th September, bringing you another edition of Cointribune’s crypto analysis! Find out about everything that has already happened in the market and what to expect next in our new article. If you want to read the previous issue of the column, please follow the link. Here we go!
As we expected, Bitcoin‘s local plunge has continued. The buyers still lack strength to move higher, so next days will be entirely devoted to search for support, or a zone where the bulls will decide it’s time to buy, while the bears will think that the first cryptocurrency is not worth waiting any lower. However, with BTC at $40,000, the latter is hardly reasonable, so the hope is that the buyers will mobilise their resources near one of the support levels.
There are a few key areas on our path from which we can bounce off. The first is around $40,000, which is an important psychological level. The second one is $35,000, which is the support formed by the lower boundary of the triangle. The third is a zone near $30,000, which is the upper boundary of the descending broadening trading channel (yellow). The last one is $20,000, formed by the lower boundary of the descending purple trading range within this model.
I doubt that the coming fall will be so extensive as to force us back to $20,000 as it would be like announcing the start of a global bear market and the imminent arrival of crypto winter, but in the crypto market you have to be prepared for any scenario.
Yesterday almost ended with BTC falling below $44,000, but the buyers came to their senses in time and defended the price. Saturday started with a slight growth, but there’s no hope that the volume will be enough to break the restraining resistance. Therefore, I urge you to be prepared for a further decline.
Saturday and Sunday, on the other hand, are always special days for the cryptocurrency market. Within a weekend, anything can happen to Bitcoin and altcoins, as new volumes can emerge at any moment and significantly change the balance of power. In general, in such an environment we could use a gift from Tether in the form of a new pack of USDT. Maybe then, the market would become optimistic again and change the trend to a more positive one.
At the time of writing, Bitcoin is trading at $45,000 and is even about to move below that price level. However, it shouldn’t be forgotten that this move still fits into the overall bullish picture. In fact, we’re moving within a triangle, with a bullish wedge pattern being one of its important parts. Such declines not only do not contradict it, but rather complement it perfectly because one of the major factors of this formation is the accumulation, which occurs due to the alternating movement of the asset from the upper boundary of the triangle (resistance) to the lower (support) boundary and back in the conditions of a constantly narrowing trading range. Actually, that’s why it’s called a triangle, as we refer to a trading channel, but not in its usual sense. Instead of two parallel lines that will never cross, we have channel walls (the same lines) facing each other that move in the same direction until they cross.
Since the dump started near $52,000, this point has now become an important level, which together with the all-time high of the BTC price ($65,000) forms a new dynamic resistance. This means that there’s a new descending trading channel, which I have marked with the pink lines.
Conceptually, it’s no different from the purple price range, and the only important thing we should learn from this formation is the presence of a strong resistance in the $50,000–$52,000 area.
A move to the lower boundary of the pink channel is not yet considered, as it would contradict the triangle concept. To reach such conclusions we need confirmation in the form of a new low around $25,000.
Earlier I repeatedly stated that BTC is still bullish. Even though pessimistic sentiment is already starting to spread around the community, there’s still nothing to worry about. Frankly, even in this moment of local uncertainty there’s still a good chance that Bitcoin will break through the resistance instead of making another round of lows dictated by the triangle. However, even that will take some time.
The second most capitalised cryptocurrency has been imbued with the sentiment of the cryptocurrency market. Although Saturday started with some small buys, the previous two days ended with solid red candles for Ethereum.
The biggest altcoin has broken out of the red and purple channels, and right now is trading within the white range. It still has support on the way in the form of the upper boundary of the triangle, but if it fails to withstand the pressure from sellers, we can expect ETH to move close to $2,000.
In any case, even if ETH suddenly drops, it will only provide an additional opportunity to get hold of the asset. Relatively recently priced at $90, the biggest altcoin is now valued at several thousand. It’s reasonable to assume that Ethereum could reach $10,000–$20,000 next time, just as it happened with BTC.
The Fear and Greed Index has made a significant leap towards fear. People are waiting and the Bitcoin recovery is not starting. The number of short positions in the market is only increasing day by day.
Even though the situation looks frightening, we shouldn’t despair. For the same reason that I mentioned the possible danger when we were in the zone of extreme greed just a few days ago.
The crypto market is a global environment with a lot of money invested. And this isn’t about retail players like you and me, but large companies like MicroStrategy, funds like Grayscale, and prominent figures in various fields, including politics. They will not let their investments burn out. All they can do is inject even more money into the market, fund positive news coverage, and thereby raise the optimism in the crypto sphere.
The pendulum of the market is swung occasionally, that’s not a secret. Digital asset trading is an opportunistic game of tug-of-war for both sides of the conflict, and it’s not about the bears and the bulls, but the market whales and the smaller fish like you and me.
Every time there’s a trade in the market, someone gains and someone loses. The people who are commonly referred to as the whales, by virtue of the fact that they own wealth far exceeding our own, are more interested in our loyalty to this game than anyone else is.
When the whole market is in a state of euphoria and actively buying – they sell. When everyone is in a hurry to dump their assets and lock in a loss, they confidently increase their positions. Such is the case right now. The more retail investors fear, the more the big players will actively buy. Eventually, when they gather enough assets, the market pendulum will be swung again and we ourselves will start to buy and thus increase the price of cryptocurrencies that the whales own.
The leverage side of things should not be neglected either. With the scales now tilting towards the bears, thousands of leveraged trades are being opened every day. Most of them will eventually be liquidated with losses, which will fuel the next round of market growth. Simply because it’s more profitable for those who have more money and assets than we do. And the price of any asset always follows the volume.
Some would mistakenly think that this is unfair and that such manipulation should be tackled. For instance, by the methods of Reddit’s famous WallStreetBets. Yet this is a wrong belief, the implementation of which will end up in even greater losses for retail investors. Simply because each of the members of such an association will be forced to act in the interest of the group, suppressing their own. In the end, the most cunning of them will become whales themselves and the rest will be left with no money.
Manipulation has to be recognised and exploited. Buy low, sell high. This is the only way to make money in the crypto market.
Fear is not far from its peak. I’m sure there will be a significant amount of funds or a streak of positive newsworthy events in the market soon. Don’t miss your chance.
The top ten altcoins according to CoinMarketCap are blushing with shame. The only exception is Terra (LUNA), which displaced Uniswap from its position, but that asset is still only eleventh.
Solana (SOL) continues to decline, risking swapping places with XRP. However, I personally look at this only as an opportunity to buy more of this asset.
Cardano (ADA), even with its long-awaited hard fork planned for tomorrow, looks like it’s not going to grow. I’m even starting to doubt whether ADA’s price increase is worth waiting for at all.
Binance Coin (BNB) is preparing to trade another hundred dollars in favour of the bears. Even Changpeng Zhao’s increased Twitter activity isn’t helping the asset’s popularity in any way.
Elrond is the new day’s gainer. At the time of writing, this asset has already brought its holders more than 16% profit.
The loser of the day is Perpetual Protocol. At the time of writing, the asset has already made a loss of around 14% to its owners. However, judging by the fact that the coin has almost reached its support, there’s a possibility that it will soon reverse and continue to move within the ascending channel.
Bitcoin is falling. ETH and other altcoins succumb to its influence and the fear index signals a high degree of pessimism in the market. However, it is times like these when the game-changing moments happen. Be prepared to seize the upcoming opportunity. But don’t forget about the risks and don’t neglect your stop-loss orders.
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) ₿||$60,982.08||0.46%|
|ETHEREUM (ETHUSD) Ξ||$4,079.10||2.74%|
|IMM. US (REIT)||$2,731.82||0.43%|
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