More Stability in the Market after the Crash

News • 2021/05/21 • by

Bitcoin / US Dollar

After hitting a bottom of around $38,000, Bitcoin rebounded for a little, reaching $40,000. The $40,000 point was considered a critical point for the current price development as it served as a previous all-time high level, pressing enough resistance in the market that time in the past. That resistance had broken after Tesla’s decision to purchase $1.5 billion in Bitcoin.

Before that, we can observe that there was a compression period between $30,000 and $36,000. This compression period served as the step for the next jump in the Bitcoin price. The next scenario that could become a reality in the market is a new compression trend development around the $40,000 point. This is a positive scenario as this is a higher compression point from the previous period between $36,000.

The bullish case for this period will be a traceback to $47,000 point, which was the entering point for Tesla’s purchase. This move will show that investors have restored their faith and trust in Bitcoin, regardless of Tesla’s moves.
The trading volumes have remained on high levels, affected by the large sell-off in the last few days. The moving averages continue to move in bearish formation, shaping a negative momentum for the market.

In the short-term diagram, we can observe that the overall correction reached even at 40 %, indicating that this might be the end of the bearish cycle. This is an ambitious prediction to make but more corrections in the past have stopped around 40 % from the recent all-time high level.

Indicators

MACD index has started to move positively but remained on the negative side, bringing more negative momentum in the market. The RSI index returned in the zone above value = 30, indicating that the market will try to make a positive move in the next days to contradict the last days’ period.

Ethereum / US Dollar

A similar reaction was evident in the Ethereum market as the price hits a bottom at $2,400 and rebounded at $2,700. In this situation, the bearish scenario indicates that there is a compression zone between $2,000 and $2,400, that was formed after Ethereum broke the $2,000 all-time high level.

This compression zone could serve as the absorption move for the current market situation. If the market moves around those price levels, we expect a mid-term period with lower volatility that could lead to the next decisive move. Apart from this, we expect that this zone could serve as the support zone for the next period in the market.

From the upper side, there are no many resistance points in the uptrend that could serve as the next target for the market development. Of course, any move above the $3,000 zone could serve as the spark for another bullish cycle. We expect a milder approach in the price formation as the entire market will try to find the new forms for the next period.

The trading volumes have remained on the high levels, due to the entire situation in the market while the moving averages are on bearish formation, following the last days’ trend.

Indicators

MACD index plummeted even more in the negative area, showing that there no momentum in the market that could roll the market upside down. The RSI index moved around value = 40, indicating that a further correction might be possible in the next few days.

Ripple / US Dollar

The reaction in the Ripple, after hitting a bottom around $1.05, was a small rebound at $1.10. Comparing with other cryptocurrencies, Ripple has remained on the high levels, without losing any ground in the technical field. The high zone between $1.00 and $1.80 will be the critical zone for the next period that will bring Ripple on the winners’ side.
The most important part of the current market situation is the $1.00 support point. If this point breaks down, we might expect a further downtrend on the market and a worse situation than the current one. On the other hand, the bullish trend could come back more easily if there is an uptrend above the $1.40 line. This line is the average of the larger price zone on the higher price levels. Breaking the average could lead to another bullish trend in the market.
The trading volumes made a small spike while the moving averages have positioned at bearish formation, showing that there are more concerns in the market about Ripple’s rebound in the next period.

Indicators

MACD index dropped again, indicating that there is negative momentum in the market that could act negatively in the short-term future. The RSI index moved to value = 40, showing that there is a possibility for a further downtrend in the short-term future and the bearish cycle might not have ended for Ripple.

Litecoin / US Dollar

The steepest from all downtrends was on Litecoin’s case as the price fell from $280 to $195 in just a day. This correction showed that the market has no depth at those levels to absorb any corrective moves. The support level around $225 didn’t show any strength and it collapsed immediately so there is time for the next major support level.

This level was found around $200, where the price made a stop and start to rebound at this point. On the bearish side, the next support level lays at $175, which served many times as the core support level in the previous compression period. We expect that another correction might be evident in the next few days.

On the bullish side, the $225 and $300 points are the next positive levels that could bring the market into the next bullish trend. This move might be delayed for now, following the rest of the market moves.
The trading volumes moved at higher levels due to the last days’ situation while the moving averages formed a bearish position, bringing more negativity in the market.

Indicators

MACD index dropped even more during the last days, making the market at the lowest possible point regarding its momentum. The RSI index dropped at value = 35, showing that the market could stop at a lower point before making a positive change in the price formation.

Bitcoin Cash / US Dollar

Bitcoin Cash has moved in the critical zone between $700 to $800, which was the main resistance point during the last year. This point has served as a resistance level during this period and as a support point during the last bullish period. This level shows that the coin has been placed at a turning point that every scenario could be possible.

The bullish scenario could turn the price up to $1,100 at this period, marking the start of a new bullish cycle. On the opposite side, the compression zone between $500 and $600 could hold and absorb any bearish moves in the short-term future. We expect that the coin will follow the rest of the market without any declines in this process.

The trading volumes have made more spikes than ever before, showing that the market has enough traction. The moving averages have formed a bearish position, bringing more negativity to the market.

Indicators

MACD index dropped, even more, showing that there is a negative situation in the market while the RSI index moved around value = 40, which means that there is a potential downtrend in the market for the next period.

Correlations

Bitcoin / Ethereum = 0.63 (+ 0.43), Bitcoin / Ripple = 0.72 (+ 0.16), Bitcoin / Litecoin = 0.83 (+ 0.29), Bitcoin / Bitcoin Cash = 0.74 (+ 0.30)

The correlations field took the upside during the last days as the entire market took a stop in the bearish correction. Every coin took a shot of correlation points as the market will try to shape a more integrated position during this period. Ethereum returned on the medium correlation zone, joining Bitcoin Cash and Litecoin, delivering a milder approach in the price formation through Bitcoin’s moves.

On the other hand, Ripple passed on the strong correlation side, showing that its stability might look closer towards the Bitcoin’s ones. Nevertheless, we expect a closer approach in the next few days without any surprising moves on the block.