Bitcoin / US Dollar
Price Analysis
Yesterday, it was definitely a "red' day for Bitcoin and the entire crypto market. This day might be the crucial day when the trend reverses and turn from bullish to bearish. The price dropped from $11,800 to $11,300 but this is not the most important part of our analysis. After the $10,000 break, Bitcoin made a crazy rally, gaining over 40 % for one month. The peak reached $12,400, breaking several resistance levels and establishing new support levels in the process.
The price has been corrected several times during the last month but it never dropped at risky levels that indicate a reversal in the general trend. This happened yesterday as the price dropped almost 5% during the last 24 hours and it broke the short-term support level, which happened to be the lower trend line in the parallel channel that was formed during the uptrend. The break of this line indicates that the market has reversed and we will possibly observe more support levels to break in the next days. The crucial level that will determine the steepness of the fall will be around $10,800.
The $10,800 point was the initial point for the recent uptrend and its break will initiate more liquidations as the investors will claim their capitals to invest back in lower prices or move them in different currencies. In any case, the volumes were lower than expected and there is going to be much larger in case of a major move in either direction. On top of that, the two moving averages (50-day and 200-day) cross each other, creating a reverse "Golden Cross" signal that indicates a bearish turn downwards.
In the short-term diagram, we can observe that every peak for Bitcoin was followed from a corrective move that brought the price back to the parallel channel. This time, the price was between the lines of the parallel channel and broke negatively, creating a bearish sense in the market and a possible downturn for the price.
Indicators
MACD index took another negative turn, showing that the negative momentum is gaining field in the market. In parallel, the RSI index moved below value = 50, creating a bearish mood for the Bitcoin environment. Both indexes agreed for the trend reversal and we should be aware of that.
Ethereum / US Dollar
Price Analysis
Ethereum didn't remain unaffected from the market fall. The price dropped below $400, at $380, creating a "head and shoulders" formation, which indicates a bearish drop during the next period. The "shoulders" will be around $380 while the "head" lays at $440, which was the local high for the 2020 market. The Ethereum market will probably follow the rest crypto market in the bearish trend but there would be different reactions to market events and correlations between other cryptocurrencies.
The milder reactions to the market are correlated with the multiple jumps of the price during the last months, where the market creates depth and attracts capitals from different sources of investors. The depth will create more opportunities for investors to claim their profits and abandon their positions in Ethereum, without any panic in the short-term period.
The volumes have not dropped yet to previous levels, showing that investors are still engaged in the market and want to explore more opportunities in it. The reverse "Golden Cross" signal was another fact that makes us believe that the trend has also reversed for Ethereum.
Indicators
MACD index has increased its negative momentum and it might lead to further downtrend as the market momentum is shown during the previous days. In parallel, the RSI index moved below value = 50, indicating that a bearish period is highly possible to follow.
Ripple / US Dollar
Price Analysis
Ripple, after several ups and downs during the last days, tries to fit in the new trend that will be established in the crypto market. After reaching its peak at $0.32, Ripple's price starts to drop, laying at $0.27 yesterday. Even if there is no clear technical indicator (apart from the moving averages) that shows there is a major turn in the market. The price has its back and forth in relevant frequency but nothing special that we could mention.
In this case, we should take into account Ripple's correlation with the entire crypto market. Ripple was considered to have the least favorable correlation with Bitcoin, the market leader and it was thought to be an alternative for portfolio diversification. This fact changed during the last week, where Ripple's correlations exploded and return to higher levels than before. This move shows that Ripple was heavily affected by the market's turn and it is expected to draw more attention if the trend continues.
We expect Ripple to follow the rest of the market, falling steadily and slowly. As we can see, the volumes are much lower than the previous uptrending period while the moving averages had formed a reverse "Golden Cross" a couple of days before.
Indicators
Regarding the MACD index, the index is following a steadily negative move, indicating that the price will slip further to lower levels. The RSI index indicates the same direction as it moves below value = 50, showing a bearish mood will cover the market.
Litecoin / US Dollar
Price Analysis
Litecoin's market took a major hit during yesterday as a strong corrective move hit the market and move the market at a crucial point. As we told in previous articles, Litecoin's market has expanded from $54 to $68, creating prospects for more action. The expansion led to shrinkage between $59 and $62, while the last move was at $57.
$57 point is a crucial point for the Litecoin market as it was the major resistance/support level for the previous month. The move above or below this price will determine the next direction for the entire market. In this case, we have to underline that Litecoin could not hold alone in a bearish market that will possibly establish in the entire crypto market.
The volume has been decreasing during the last days, showing that Litecoin could not attract more investors. The moving averages will possibly meet in the next days and will give another bearish signal in the market.
Indicators
MACD index has taken a steeper decline during the last days, showcasing that there would be another decline in the price during the next period. In parallel with MACD, the RSI index moved below value = 50, showing that there would be more fall in the market
Bitcoin Cash / US Dollar
Price Analysis
The market effects are much heavier at Bitcoin Cash's case. The price topped twice at $320 before correcting back to previous levels. The core support level for Bitcoin Cash laid at $280, a level that broke yesterday where the price stopped at $275. This level could spark the start of a major bearish trend in the market. As we have told in previous articles, Bitcoin Cash is mostly affected by market trends and less from its fundamental characteristics.
This a fact that allows us to tell that Bitcoin Cash will follow the market trend (a bearish one) this time and it won't be the exception in the market. Given that we have already taken several notifications from technical indicators regarding the bearish trend that might follow, we should have taken hedging measures in our positions. The trading volume remained lower than expected in the market, showing that investors are losing interest in the market and we might observe massive liquidations shortly.
After several crosses, a reverse "Golden Cross" signal seems to dominate in the market and show that there would be a severe downtrend in the next period.
Indicators
MACD index continues to remain on the negative side, while the lower line will shortly move below the zero line, indicating a stronger and heavier correction in the market. RSI index has moved below value = 45, indicating the same result as the above index.
Correlations
Bitcoin / Ethereum = 0.78 (+ 0.04), Bitcoin / Ripple = 0.92 (+ 0.07), Bitcoin / Litecoin = 0.73 (- 0.04), Bitcoin / Bitcoin Cash = 0.89 (+ 0.08)
The correlations moved to mixed directions, showing that the entire market is in a transitional phase, looking for the new trend to come up. More specifically, Ripple and Bitcoin Cash continue to rise, establishing a stronger connection with Bitcoin. As Bitcoin dropped during the last days, both coins followed it, creating the following trend in the market. The other two currencies, Ethereum and Litecoin, have milder reactions to Bitcoin's drop, creating another batch of currencies for medium correlations with Bitcoin. Both batches should be taken into consideration when we analyze the market, looking for opportunities.
