Another Correction Bump Follows a Rebound

News • 2021/06/09 • by

Bitcoin / US Dollar

After diving at $34,000, Bitcoin’s price made a small rebound again, hitting $35,200 this time. The new drop in the price came after the Department of Justice in the USA announced that it had recovered most of the bitcoins paid as ransoms to hackers after the attack at Colonial Pipeline.

More specifically, they claimed back $2.4 million out of the total $4.4 million that they paid in total. As the payment was made in Bitcoin, the network could not be as resilient or trustworthy as some users might think.

On the other hand, this incident is proof that using crypto for illegal activities is not the optimal case as the hackers might not receive anything in the end.

Nevertheless, the effect on the price was negative, but this starts to get in the right direction as the price is being directed towards the compression line around $36,000. As we have referred to in previous articles, new stories will make the price jump around with negative or positive effects, but a major story will shape the next trend in the market.

We expect that the price will remain around the $36,000 compression line, waiting for the next major action to hit the headlines and shape the next trend. The trading volumes went up as there was a sell-off yesterday, while the moving averages will probably meet in the next few days.

In the short-term diagram, we can observe that the descending triangle has moved in the main picture, showing that the compression trend holds the current situation under its control, allowing small moves in the chart.

Indicators

MACD index remained on the positive side, showing that optimism is not lost in the market. On the other hand, the RSI index lays below value = 40, which means that the market might correct even more before reaching a bottom.

Ethereum / US Dollar

The correction move found Ethereum in the upper side of the compression zone, meaning that a retracement at lower levels wouldn’t be so harsh like other coins. The reality proved right this scenario, making the price slope down to $2,500, which remains the average line in the current compression zone.

Ethereum has sustained the best outlook in the current market situation predicts that the next bullish round could find it a better position. This position will enable it to bring more profits to its investors while establishing a stronger position in the crypto market. From a technical point of view, we expect that the current situation will not last for long as the turning points of the compression zone have been tested, and it is a matter of time before breaking down.

If this happens in either direction, we expect that Ethereum will affect more coins than any other time in the past as more and more crypto assets are technologically reliant on its blockchain technology. In the bullish case, we expect that Ethereum surpasses the previous all-time high level at $4,200 and establishes higher levels.

The trading volumes moved up during the small sell-off while the moving averages crossed each other, forming a bullish “Golden Cross,” waiting for further confirmation from the market. We need to claim that a long-running compression trend can fool the moving averages’ strategy as multiple signals may occur in the same period due to the market’s stability.

As we are in the middle of a compression trend, the moving averages could bring more signals in the chart without any real impact on the investment decision process.

Indicators

MACD index continues to move in the positive area without losing any ground from the sell-off yesterday. In contrast, the RSI index moved to value = 45, showing that more stability will enter the market in the next period.

Ripple / US Dollar

The downtrend continued for Ripple as the price moved below $0.90 and reached $0.87. This move is not so bad as some analysts might think, as the asset has not moved below the current support level at $0.80, nor has it exited the current compression zone. The fact that it lays below the average line of $1.00 makes a recovery harder to achieve, but there are still possibilities for recovery.

We expect that Ripple will continue to follow the market leader, Bitcoin, in the small moves around this period, without major declines in that. Suppose there is a breakout in the future. In that case, the situation will be much different as it was shown clearly in the previous bullish market where Ripple has set an entirely different timeframe from the rest of the market.

The trading volumes remained on the same low levels, indicating a waiting stance against the coin. At the same time, the moving averages made two crosses during the last days, indicating that the compression trend has made a misinforming environment about the changes in the trend.

Indicators

MACD index moved near value = 0, showing that the market lacks momentum to push it positively. The RSI index moved at value = 40, which means a negative outlook for the current situation.

Litecoin / US Dollar

The price formation process for the Litecoin market is moving slowly towards the next trend. The price moved to $160, absorbing the correction trend from the larger coins in the market. As the market will wait for the next trend to be established in the rest of the crypto market, little things can be done.

The most prominent scenario is that the price will remain around $140 and $200, with corrections and rebounds, until a major move in the market will affect less strong coins and make more investors place money on them before starting to rise. The correlation between Litecoin and Bitcoin will play an important role regarding the adaptation of the trend formation.

The trading volumes made a small spike during the sell-off day, while the moving averages have been in the same place and will form a “Golden Cross” signal, predicting a positive change in the trend.

Indicators

MACD index remained on the positive side, showing a positive outlook for the momentum integration. The RSI index moved below value = 40, showing that the market might drop even more before reaching a bottom and starts to rise again.

Bitcoin Cash / US Dollar

The symmetric triangle broke down, and the price dropped to $610, showing that the Bitcoin Cash market could meet lower support levels. The next support level at this range lays around $550, a previous compression point during March 2021. From the previous trend in March 2021, the $610 was the breakout point for starting the bullish market.

We hope something similar might happen this time also, but we must consider that the market might get down to $550 before leaping back. The trading volumes have remained at lower levels, making a tiny spike in the sell-off day, while the moving averages are close to each and will meet in the next few days.

Indicators

MACD index is near value = 0, indicating no momentum in the market to push it in either direction. The RSI index moved below value = 40, showing more correction in the current situation.

Correlations

Bitcoin / Ethereum = 0.58 (- 0.08), Bitcoin / Ripple = 0.81 (+ 0.01), Bitcoin / Litecoin = 0.85 ( 0 ), Bitcoin / Bitcoin Cash = 0.86 ( 0 )

The correlation field became clearer during the week, showing that the coins will bring another trend to the market. The majority of altcoins (Ripple, Litecoin, and Bitcoin Cash) have sustained their correlation with Bitcoin, bringing a steady outlook towards their future relationship.

This kind of correlation depicts that a change in the dominant trend will surely affect every single coin in this direction. On the other side, Ethereum continues to dive in the medium correlation zone, predicting a more autonomous route if a major change happens in the next period in the crypto market.