It’s Friday, 10th 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!
The market is slowly recovering, and the reason for that is Bitcoin‘s positive momentum, though not very active yet. The first cryptocurrency is trying to recoup its losses from the recent dump, but it doesn’t look like this will be a quick process.
BTC was hit hard in the recent collapse marking the day El Salvador officially adopted the digital asset as legal tender on par with the dollar. The coin fell from $52,000 to $46,000, and at one point even reached $43,000, triggering many stop-loss orders and provoking a huge number of position liquidations.
Whatever ultimately caused such a massive collapse, it’s not the first time in the history of the crypto market that Bitcoin has lost a significant portion of its value in the blink of an eye. This was not a crisis for the rest of the market, so it can be seen as a cool-off of the asset, which compensated for the heavily overbought conditions at the time.
Right now, even though the support has held, it doesn’t look like the bulls have the strength to maintain the uptrend. At such rate, we’re in for another drop all the way down to the $35,000–$40,000 range. However, the upcoming move down within the triangle pattern doesn’t invalidate a bullish continuation scenario, which, when the time comes, will be confirmed by a strong bounce off the support line. So there’s no need to worry.
This opportunity shouldn’t be missed, as this is a great chance to significantly increase your position in BTC. In order to control the risks, I would recommend those interested in Bitcoin to buy the first cryptocurrency for half of the planned amount now and use the remaining funds allocated to this asset in case another drop happens. That way, not only will you get into BTC, but you will also reduce your average purchase price. That’s what I did myself.
You may recall that the first cryptocurrency’s current movement is fully within the triangle pattern clearly visible on 1D and 1W timeframes. As indicated in the picture above, BTC is also in the process of forming a falling wedge, which is an accumulation, occurring after a strong growth of the asset.
Currently, we are in the accumulation phase within a falling wedge. During this process, the price of the asset declines steadily, but the local highs and lows decrease along with it. Thus, a triangle is formed with the apex pointing downwards. As this apex is reached, the distance between highs and lows decreases (volatility decreases). Eventually, the coin almost ceases to change in price and at one point, there is a significant spurt upwards, beyond the boundaries of the triangle. This is how the falling wedge works.
The current support is the upper side of the triangle described above. In case the price goes lower, we will see a drop as low as $35,000. However, after that, we will see a return to the recent BTC highs.
There’s also a possibility that the support will not be breached. In that case, Bitcoin will continue to rise as previously planned. Yet before it starts, it will take some time for traders to reassure themselves that the current price is optimal to enter the position.
Of course, all of the above applies to spot traders. If you are using leverage, you should find the best point to exit your position, because a drop and a rise are equally possible now. Both of these movements are likely to change the price of BTC significantly, and it’s doubtful that your current margin will be enough to move away from the point of liquidation.
Locally, Bitcoin is bearish. However, right now, the first cryptocurrency is accumulating positions, which could easily end with the asset returning to price values near $50,000.
The volatility of any asset drops shortly before strong moves occur. This is exactly what’s happening with BTC right now, as well as with some altcoins.
The view among crypto enthusiasts is starting to spread that the current situation is very similar to what was happening in the market in early 2018, on the eve of the protracted crypto winter. However, even though the market is cyclical, such claims are premature. In addition to the falling wedge, the blue ascending and the purple descending trading channels are also playing on the bulls’ side at this stage. All of them fall within the triangle formation and will act as important supports in case events develop in a negative scenario.
Last crypto winter lasted for two years. It’s likely that the next one won’t be long in coming either. This is normal for financial markets. Many, of course, will leave cryptocurrencies, as they did in 2018. Yet those who are more familiar with digital assets will take advantage of the situation to accumulate enough Bitcoin and altcoins and then wait peacefully for the next rally.
However, it’s still too early to speculate about.
Ethereum continues its battle. The previous day almost ended with it recovering to $3,800, however, at the last moment, the bulls’ strength ran out and the second most capitalised cryptocurrency had to retreat to the support. Currently, ETH is trading at around $3,450 and that includes a partial recovery, which took place in just a few hours since the beginning of the day.
The biggest altcoin tends to move back into one of the slightly higher trading channels (blue and red). Perhaps Vitalik Buterin’s recent appeal to the community to move the NFT ecosystem to L2 and thereby stabilise the fees on the blockchain will straighten things out a bit, breathing more optimism into the asset’s movements.
In any case, even if ETH drops suddenly, it will only be an additional opportunity to get hold of the asset. Relatively recently priced at $90, the largest 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.
On top of that, Solana should also be in the portfolio of a long-term investor. It is very likely that at this rate, the asset will very soon take the third position in the CoinMarketCap’s ranking and in time, its value will start to amount to thousands of dollars.
Fear still reigns in the market. However, its degree has weakened slightly, giving in one point to greed. The indicators are certainly not comforting, but the dynamics themselves are encouraging.
People are still reeling from the latest collapse, which has left some of them sitting in loss-making positions, while others have already lost their money because they were trading with leverage and simply couldn’t avoid being liquidated during a price drop of almost $10,000.
Fear of missing out and haste bring the retail trader more losses than any wrong entry into a position. Trying to get rich in one trade has never brought anyone to the top. There’s an opinion that of all who trade any kind of financial assets, only 5% are successful. These are hardly the people who expect to cash in by putting all their savings into one leveraged trade.
Spot trading requires much more time, but it will not leave you without your savings if you make a mistake. If you have enough patience, you can always wait out a drawdown and eventually come out of the trade even with a profit. I’m speaking from my own experience. Having a 50%–80% loss in a position after a bad entry or a sudden change in the market climate (such as the latest BTC dump), after a few days, a week or a month I eventually come out of a losing trade with a profit. Because the market is cyclical, and it is not the nimble hare that wins here, but the slow tortoise.
The top ten altcoins according to CoinMarketCap have started to recover after the recent Bitcoin crash. The exception is Solana, which has been working harder than all the others have in recent days and is now resting.
However, this is far from the first fall of SOL in the recent days. Many traders would take it as a good opportunity to buy the asset, especially since it traded in the range around $215 just recently.
Such momentum for the ambitious ‘Ethereum Killer’ risks a shift to the seventh spot. The event, of course, is not critical, but definitely regrettable. After all, only yesterday SOL could push Tether (USDT) and Binance Coin (BNB) from their positions.
With a narrow margin over its rivals, Tezos becomes the new day’s gainer among the top 100 altcoins according to CoinMarketCap. In the last 24 hours, the asset has already brought its users about 39% profit, and it doesn’t look like XTZ is going to stop there.
The asset is moving within the ascending trading channel and if it can consolidate above the resistance marked in blue, it will definitely bring its holders even more profit.
Also by a small margin, Solana is the loser of the day. Now, this asset is trading 8% lower from the last high. However, that does not mean that SOL should be ignored. Perhaps now is the best time to pick an entry point and profit from the next all-time high.
The cryptocurrency market is starting to recover. However, Bitcoin is still at a crossroads and it is quite possible that very soon it will trigger new falls among altcoins.
When is the perfect time to pick up new assets in your portfolio if not now? It is likely that such discounts will not last for too long, so the logical choice would be to act now.
That said, you should also be mindful of the risks involved. Don’t neglect stop-loss orders and don’t keep all your savings in one asset.
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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) ₿||$30,421.09||1.97%|
|ETHEREUM (ETHUSD) Ξ||$2,073.71||2.62%|
|IMM. US (REIT)||$2,499.34||-0.58%|
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