The Bearish Season is on the Brink !!

News • 2021/05/19 • by

Bitcoin / US Dollar

When Elon Musk announced that Tesla stops to accept Bitcoin as a method of payment due to environmental concerns, the bears took up the market and start to sell Bitcoins for establishing a new trend in the market. The first psychological barrier at $50,000 fell while on Monday, the major support level at $47,000 broke and let the market sink even more. We have to remind you that the $47,000 point was the entering level for Tesla’s $1.5 billion Bitcoin purchase so the level was connected to the company’s newsfeed.

Today, the bearish trend continues at harder rates, making Bitcoin’s price slip down to $37,000. Around those levels, there is a small possibility for a rebound at $40,000, which a previous all-time high level. From this point and on, the only way to stop a heavier bearish trend is the established market depth. The market depth means that institutions and individuals won’t sell any positions as they are still profitable and don’t want to lose a future uptake.

Seeing the graph below, we can observe that the core market depth was developed between $29,000 and $36,000, where many institutional investors were opt-in and try this new asset for their portfolios. If these investors will try to claim their profits and exit the market, that would be horrible news for the market. After the rain, there is always sunshine, so we will wait and see how this trend will evolve in the next period.

The trading volumes surged during the last days, making the market hotter than ever. The moving averages have positioned in bearish formation, predicting more downfall on the way.

In the short-term diagram, we can observe that the market has been subjected to more and more compression during the last period and at high levels, making the market lack stamina and finally break down in a bearish trend.

Indicators

MACD index is moving deeper and deeper in the negative zone, making the market lack any momentum for upbringing. On the other hand, the RSI index fell between values 20 and 25, indicating that the market will probably rebound at this point and claim back previous higher levels.

Ethereum / US Dollar

Today, Ethereum had the most bearish reaction, plummeting from $3,300 to $2,600 in just a few hours. Practically, Ethereum hasn’t enough support or resistance points above the $2,000 level because the asset was in a price exploration mode, trying to find the next all-time high level.

At this moment, Ethereum’s next support zone lays between $2,400 and $2,200, which was the starting point for the last period’s bullish trend. If this level breaks down in the short-term future, the $2,000 point is the next point that will settle the next phase of Ethereum’s development. Breaking the $2,000 point will also be an indicator that the market will try to reset and find new resistances to bring them back from last year.

We will wait to see if the $2,000 point will stay strong enough to absorb any bearish moves on the lower side or we will face a new reality for it. The trading volumes have surged due to the sell-off situation while the moving averages will cross each other in the next days, marking the start of the bearish period.

Indicators

MACD index moved deeper in the negative zone, showing that the negative momentum is shaping the next period for the coin. The RSI index moved below value = 40, indicating that the bearish trend has more to give in the price formation process.

Ripple / US Dollar

After moving oppositely from the entire market, it was Ripple’s time to correct and move on the bearish side. The market corrected from $1.60 to $1.23 in a few hours’ spans, moving on the lower side of the mid-term compression that has been formed on the market.

As we can observe from the diagram below, the boundaries of the recent ups and downs for Ripple lay between $1.80 and $1.00, a volatile span for the coin. At this moment, the coin has not exceeded any support point in the chart or break it with bearish momentum. The only thing that could implicate an underlying bearish trend is the sudden change in the trend.

We need to see if Ripple will continue to absorb any bearish waves from the market or it will let the price flow with the rest of the market. The trading volumes have remained on the same levels and the moving averages are close but in bearish formation, predicting the continuation of the current trend.

Indicators

MACD index, even if it was close to passing on the positive side, got down today, placing more effort in the market for a rebound. The RSI index moved to value = 45, which indicates stability in the price but with a negative outlook.

Litecoin / US Dollar

Litecoin found new support levels around $280 that couldn’t last for long and the price melted down today at $235, putting pressure on the next support level at $225. The $225 support level is considered one of the strongest in the current period as it served several times as a resistance level that blocked the market from reaching the previous all-time high level at $240.

At this point, as we can see in the entire market, many coins are just above major support points that hold the market at a higher level. If those points start to collapse, the entire market will face a massive bearish wave that will shape the market for the next period. We will wait to see the $225 testing in the next days that will determine the next moves in the Litecoin market.

The trading volumes were higher than normal during those days while the moving averages crossed each other, forming a reverse “Golden Cross”, a bearish signal that marks a change in the market momentum.

Indicators

MACD index moved deeper in the negative zone, making the momentum work in a bearish way. The RSI index dropped below value = 40, indicating that the market will probably drop more in the next few days.

Bitcoin Cash / US Dollar

A crucial support point was lost today for Bitcoin Cash’s market as the $1,100 point was broken. This point served as the local high level during the previous month. Seeing the previous price loop again, we can see that the closest support level lays around $750.

Even if those price movements seem quite volatile in the price chart, Bitcoin Cash is used to that and we shouldn’t be surprised with this kind of move. Below this level, the market depth is much heavier and we expect that those levels will market a potential restart for the market development.

The trading volumes were increasing the last days as more and more were selling while the moving averages crossed each other and formed a reverse “Golden Cross”, a bearish signal for the price formation.

Indicators

MACD index moved at lower levels, bringing more negative momentum in the price formation while the RSI index landed at value = 40, which indicates more downtrend in the short-term future for Bitcoin Cash.

Correlations

Bitcoin / Ethereum = 0.20 (+ 0.07), Bitcoin / Ripple = 0.56 (- 0.32), Bitcoin / Litecoin = 0.54 (+ 0.17), Bitcoin / Bitcoin Cash = 0.44 (+ 0.13)

The massive bearish trend in the crypto market shook the correlation field, retracting every coin’s position according to Bitcoin’s moves. Litecoin and Bitcoin Cash have increased their exposure in the Bitcoin’s trendsetting but they remain on the medium positive correlation zone. In the same zone, Ripple has taken a deep dive, taking into consideration that it was the closest coin to Bitcoin.

This was a positive signal for Ripple as it didn’t experience heavy losses on the first side. Last but not least, Ethereum continues to sustain a low correlation profile with Bitcoin, making it harder to bring towards a more bearish field at least for now.