It’s Wednesday, 8th September, bringing you another edition of Cointribune’s crypto analysis. Find out everything that has already happened in the market and what to expect next in our new article. Here we go!
On 7th September, the price of the first cryptocurrency plummeted, breaking through support, including the psychological level of $50,000, and then within an hour the asset collapsed to near $46,000, reaching $43,000 at one point. It was the biggest fall of BTC for a long time. The correction knocked $10,000 off its price, which has regained only $4,000 since.
For a while, the price of the first cryptocurrency returned to the descending channel marked by the purple lines. However, albeit with a delay, the support around $45,000 still took its toll. The price may have been partially recovered by some short sellers who decided to take their profits in order to capitalise on the sudden dump.
Among the preconditions for such a development, I can personally highlight only the “extreme greed” of the Fear and Greed Index. Surely, 79 points for this indicator is not the limit, but the phenomenon itself makes you think that someone will take advantage of this near-greedy optimism.
Technically, we have rolled back in time to the point where we need to consolidate above $50,000. We are again at the mercy of the triangle zones and a further rise to the breakout of the landmark resistance is questionable. On a wider scale, of course, the picture has not changed. In the long term, we still aim to reach $90,000 – $100,000 per BTC, but in the current scenario, Bitcoin might have to shift towards the lower boundary of the triangle and accumulate strength for a new spurt.
On the other hand, yesterday’s retracement wave can also be considered as a good relief for the market. The first cryptocurrency is no longer perceived as an overbought asset and only a negative background can create problems, which are bound to follow such a fall. Very soon, you will hear a bunch of different BTC critics who will assure you that Bitcoin is a bubble, and the first signs of its bursting are already evident.
However, I urge you not to believe these rumours. I’ve been dealing with cryptocurrencies for quite a while and I can confidently state that what some pundits mistake as a bubble is just a feature of cryptocurrencies, expressed in faster market phases based on high volatility of these assets.
7th September should have been the day Bitcoin was officially recognised as legal tender in El Salvador. However, it’s likely that the date will only be remembered by red quotes on cryptocurrency exchanges.
Cryptocurrency analyst Willy Woo assures that yesterday’s dump was triggered by activity in the crypto derivatives market. However, even he couldn’t figure out what exactly drove this development.
Cryptocurrency exchanges also suffered. While Binance, where I was watching the market crash yesterday, was still able to process transactions and only charts went crazy, the market giants like Coinbase, Kraken and Gemini had to suspend operations and the option to make deposits and withdrawals.
Notably, the fall of the first cryptocurrency occurred against the backdrop of the Salvadoran government’s initiative, under which citizens were to receive $30 (~£21.8) in BTC each. Twitter users even organised a flash mob of sorts, encouraging everyone to buy $30 worth of Bitcoin to support the asset and celebrate one of the first precedents of the first cryptocurrency being recognised by the state as official tender.
MicroStrategy head Michael Saylor has also joined the initiative.
Who is to blame for the crash of the first cryptocurrency? The Salvadorans, who were not particularly happy with the adoption of BTC from the beginning and may have started selling the received bonuses actively? Was it some external force that decided to lock in profits and closed a substantial portion of their holdings, taking advantage of the public frenzy? Unfortunately, that’s something we will never know. Right now, however, Bitcoin is slowly recouping its losses.
I would also like to remind you that within the BTC/USD chart on 1D and 1W timeframes (one day and one week) there’s a clear “bullish pennant” pattern, which speaks about the potential for the first cryptocurrency to move as high as $90,000 – $100,000. It may take some time for this to happen, the bull run is still anticipated.
The biggest altcoin also suffered in yesterday’s rollercoaster ride. Ethereum lost about $1,000 in value and has currently regained only half of that.
At this stage, ETH continues to move within the ascending trading channel. The market sentiment shifted, but the second-largest cryptocurrency was saved by a strong support, to which the price subsequently returned to.
It’s difficult to say how things will develop further. The market has been badly battered, leaving many with no money and a loss of optimism. Bitcoin is trying to recover, but at this point, it’s still dealing with some bearish resistance, so another round of declines may come soon. And those declines will not spare Ethereum.
The Fear and Greed Index has gone neutral. There’s no trace of yesterday’s “extreme greed”, and uncertainty now reigns in the market. However, since a ‘bear feast’ causes this very uncertainty, locally, the market is bearish rather than neutral. It will take some time to overcome the consequences and prices will recover.
CoinMarketCap’s top ten altcoins have made solid losses for their holders. Not that it was their fault, but when you think about it, Solana (SOL) was the most resilient in yesterday’s dump. Certainly, its price also dropped. Yet this asset, unlike all the others, continues to recover, even in spite of the uncertainty in the market.
There’s another curious detail about SOL. If Ripple (XRP) doesn’t start to rise, Solana will have already displaced it from the sixth spot of the CMC by the end of this day. By the end of the week, the same plight could befall Tether (USDT).
While Cardano’s (ADA) CEO Charles Hoskingson was trying to ride out a wave of FUD associated with problems encountered in the test network of the project, the blow came from Bitcoin and crashed the price of his asset anyway.
Binance Coin lost almost $100 of its price. It will take time to recover, but judging by Changpeng Zhao’s tweet, the entrepreneur is not particularly concerned about what is happening.
The most resilient representative of the top 100 cryptocurrencies, as well as the new day’s gainer, is NEAR Protocol. The asset was not only able to withstand Bitcoin’s pressure, but also brought its holders about 40% profit overnight.
The new day’s outsider among the top 100 cryptocurrencies according to CMC is THETA. The asset has shown a good upside potential, but the impact of Bitcoin has strongly corrected its movement. THETA has fallen in value by nearly 26% overnight.
The cryptocurrency market can be very unpredictable. Yesterday’s dump is a clear proof of that. The high volatility of digital assets has long been no secret to anyone. This is not the first time Bitcoin has lost tens of thousands of dollars in a matter of minutes.
However, each such move means millions of dollars in losses for retail players. In order to always stay ahead, never forget stop-loss orders 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) ₿||$63,091.18||3.58%|
|ETHEREUM (ETHUSD) Ξ||$4,221.99||3.43%|
|IMM. US (REIT)||$2,738.86||0.26%|
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