Bitcoin / US Dollar
Bitcoin's price dropped below $19,000, landing between $18,800 and $18,900. This is not a major correction to worry investors but we should take a closer look at the two developing scenarios that may come out in the market.
The first scenario indicates that Bitcoin is making regressive waves over a new equilibrium, establish around $19,000. The "equilibrium point" can be determined as a price point where the market has developed enough depth in it and buyers and sellers are not willing to move in any action as they are happy with the current situation. We can recall during 2020 that the $10,000 point was a similar case for the Bitcoin market as the price kept on bumping on it and remain on that level for a significant amount of time. This meant that investors on both sides (bulls and bears) were happy to see Bitcoin at $10,000 until the market conditions changed and the price surged to higher levels. This scenario could replicate this situation where many investors have stopped buying new Bitcoin positions while some others have stopped selling as they expect a new bullish trend to extend their profitability. In this scenario, the price will remain around $19,000 until a new fact came over and disturb the calm situation.
The second scenario indicates that investors have been tired of waiting for Bitcoin to grow above $20,000 and are ready to liquidate their positions, making Bitcoin to drop even more in lower positions and support levels. In this case, the scenario will become a reality if Bitcoin drops in the first minor support level of around $17,000.
The trading volumes continue to remain at lower levels while the moving averages have come closer to each other, creating a bearish feeling among investors.
In the short-term diagram, we can see that the price volatility framework is shrinking to higher levels, creating expectations, and making the first scenario that we analyze above more possible. The price is moving during the last 3 weeks above $16,500, meaning that more market depth is created here.
Indicators
MACD index decreased again today, making the absence of momentum more evident and indicating that a bullish trend is far from happening. On the other hand, the RSI index moved to a value below 60, indicating that the price has a stable outlook with a potential bullish move to follow on.
Ethereum / US Dollar
Ethereum's price dropped today, landing at $575. This means that the price is just a step before the first minor support level which stands at $570. The reality is that Ethereum has not developed major support levels in the current bullish trend except from the $480 point which was the previous 2020 high level. In the meantime, there are two minor support levels: the first at $570 (as we mentioned before) and the second at $520.
We have also to remind you that the current bullish trend was a product of Bitcoin's power to rise since October and create positive momentum for the entire crypto market. The current Ethereum trend was mostly fueled by Bitcoin dynamics but we believe that there are a few fundamental elements, like Ethereum 2.0, that helped in the current situation. In any case, we think that if Bitcoin corrects in the next period, Ethereum will follow and will find support in the abovementioned support levels.
The trading volumes are moving at low levels while the moving averages are still apart from each to form a reverse "Golden Cross" signal.
Indicators
MACD index decreased, even more, today, showing that the market momentum continues to decrease day by day. The RSI index dropped at value = 55, showing that the price will remain stable in the next days, but with a positive outlook for the next period.
Ripple / US Dollar
The only stable cryptocurrency in the current period with fewer fluctuations than ever is Ripple. Ripple's price has remained at $0.60 and nothing has changed during the last week. This stability creates a larger consolidation in the market in terms of investors as the majority of them have liquidated a part of their Ripple positions when the price hits the 2020 high levels and they are waiting for the next bullish move.
This means that they are happy with the current situation and they will establish a stable level of around $0.60, where everyone seems to be happy. This happened during 2020 with the $0.25 level, which changed after Bitcoin made the breakthrough in the crypto market and head to all-time high levels. The same scenario could apply here. If Bitcoin will head to another all-time high level, Ripple will follow and establish higher positions in the market.
The trading volumes continue to lower every day but they remain higher than those in the previous stability period. The moving averages have come closer during the last days and the stability projection will eventually make them meet each other.
Indicators
MACD index continued to drop for another day, indicating that the stability period will vanish the market momentum into thin air. The RSI index dropped below value = 60, indicating that the price will follow a stable line with a positive outlook.
Litecoin / US Dollar
Litecoin dropped again, landing at $80. The price is still considered to be at high levels, taking into consideration that the higher levels for Litecoin during 2020 stands between $70 and $90. Litecoin was strongly correlated with Bitcoin and this allowed it to establish a strong position at higher levels.
We expect Litecoin to follow Bitcoin's dynamics in the next period. If Litecoin derived from Bitcoin's trend, the first support level stands at $70 while the major support level stands at $67, which was much stronger in the previous period. The next period will reveal to us if Litecoin will continue to exist as Bitcoin's alternative, as it started in the past.
The trading volumes continue to decrease during the last days but they remain higher than in the previous stability period. The moving averages are still close to each other, meaning that a bearish move will bring a negative signal in the market and lead investors to potential liquidations.
Indicators
MACD index decreased for the fifth day in a row, making the market momentum to stay against the bullish trend for now. The RSI index dropped at values between 50 and 55, indicating that a stable trend will be followed for now, with a positive outlook for the next period.
Bitcoin Cash / US Dollar
Bitcoin Cash experienced another downfall this time, landing at $275, moving just a step before the $265, which is the major support level for the previous period. Bitcoin Cash has the most bearish approach in the current situation and it is most possible to acquire more hits in the current period from other events.
We believe that the correction mode will hit Bitcoin Cash much harder than the other cryptos as it has more weaknesses at a fundamental level. In such a case, we have highlighted that the 3 support levels lay at $265, $245, and $220. In the opposite scenario, it is really difficult to predict a certain move as its price development was not clear in the previous period.
Indicators
MACD index continues to drop for the entire week while the RSI index dropped below value = 50, turning the prospects from positive to negative. This could be an early sign for investors that we are passing in the bearish trend.
Correlations
Bitcoin / Ethereum = 0.77 (- 0.01), Bitcoin / Ripple = 0.38 (- 0.06), Bitcoin / Litecoin = 0.82 (- 0.03), Bitcoin / Bitcoin Cash = 0.51 (- 0.06)
The correlations remained on a descending trend at the current moment, leading to a progressive unbundling for the crypto market. Ethereum remained on the same level of correlation, just like Litecoin, which both of them retained a "strong" correlation with Bitcoin. On the other hand, Bitcoin Cash and even more Ripple have continued to descend its relation with Bitcoin, leading to a bigger footprint in the "medium" correlation zone. These results became evidence that the market is not following the Bitcoin trend step by step, as they try to stay untouched from that (like Ripple) or they are moving in bearish positions (like Bitcoin Cash).
Key Notes For Today
Bitcoin passed on levels below $19,000
Ethereum dropped to $575
Ripple remained stable at $0.60
Litecoin made a small correction at $80
Bitcoin Cash dropped to $275
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Remitano.
Every investment and trading move involves risk, you should conduct your own research when making a decision.
