Price Analysis (24 February): After the first major correction in the $50,000 era, Bitcoin (BTC) made a rebound move today !!!

News • 2021/02/23 • по

Bitcoin / US Dollar

After correcting below the first support level at $50,000, Bitcoin’s price returned above this level, hitting $51,000. Yesterday, the price reached even $45,000, making smaller investors shake up and panic for a potential change in the trend. As we have mentioned in previous articles, after an all-time high level, there is a severe possibility for any coin for a major correction up to 40 % sometimes.

The next support level in this situation lays around $45,000 - $47,000, which was the previous level before Tesla announces that it converted $1.5 billion of cash in Bitcoin. From this point and on, we have two possible scenarios that the market will probably follow.

The first scenario, the bearish one, is called the “dead cat’s bounce”. In this scenario, the price after a major correction is making a rebound, making a portion of investors liquidate their positions immediately, fearing that this is the chance to get their money back. Those liquidations are making the price drop even more and the bearish vibes are becoming more and more evident.

The second scenario, the bullish one, is called the “cleaning”. This means that a major correction has happened from investors that believe the asset has reached its all-time high level and they decide that they should opt-out of the market.

This is the “cleaning”, meaning that non-believers are exiting the market, leaving up spots for people that believe the asset will move at higher levels and they are ready to enter the market. In this case, the “cleaning” will bring new all-time high levels in the market, making previous investors even richer. This move needs major support from new enthusiasts, especially from the institutional space.

The trading volumes have made a spike during the recent sell-off while the moving averages have sustained their gap for the last space.

In the short-term diagram, we can observe that the market is consolidating power above the $40,000 level, showing that the trend’s sustainability needs always more and more investors to bring the price at rising mood. Also, the support levels are more evident in the zoom version around $47,000 and $37,000.

Indicators

MACD index passed on the negative side, bringing this mood from the recent correction. If the trend continues in a bearish mood, the MACD index will bring more negative momentum to the market. RSI index moved below value = 60, indicating that there would be mild moves in the upcoming period for the coin.

Ethereum / US Dollar

Ethereum broke the first support level in the market chart, around $1,800, and headed for the second support level around $1,600. In the day-span, the price dropped even at $1,400, touching the main support level in the current bullish market, which has developed enough market depth to absorb any bearish thoughts.

The price rebounds today, reaching $1,700. The same scenarios that we described in the Bitcoin section can be applied here, showing that the market has more integrated issues than ever before. This also means that the market will need more capital to be deployed in the coin to sustain the bullish trend. The first scope for the coin will be to reach the $1,800 point and the rest will be examined in the future.

The trading volumes made a spike during the last two days, confirming the sell-off condition in the market while the moving averages have come closer to each other, meaning that we might observe a change in the trend after the cross between the two lines.

Indicators

MACD index dropped, even more, indicating that the market won’t increase the increase through the momentum way at this point. The RSI index moved around value = 50, indicating that the price will remain on the same levels for this period.

Ripple / US Dollar

Following the market trend, Ripple made another correction during yesterday’s session, dropping from $0.57 to $0.37 in just a day. The price surges today to $0.48, bringing a new breed to the market. We knew from previous analysis that Ripple has become unpredictable in the last period as some crypto exchanges removed the coin from their listings, creating liquidity gaps in the market.

If we took under consideration only the fundamental elements, the prospects are not very bright for Ripple. From a technical perspective, there is a possibility for another bearish market as in the previous time, when the price went on the same levels. If the market needs to move at higher levels, there is a need for returning at the previous levels around $0.55 and above.

The trading volumes made a small jump during the last days while the moving averages will probably meet in the next days, making the trend change from bullish to bearish.

Indicators

MACD index moved even deeper on the negative side, indicating that the negative momentum has been slowly established in the market. The RSI index moved at value = 50, indicating that the price will remain on the same levels for this period.

Litecoin / US Dollar

Litecoin followed the main trend, correcting from $230 to $180 in two days. The correction dropped the price at $160 but the price surges to $190. The first support level around $210 breaks down immediately and the $180 point has been a previous local high level, creating some support in the market.

The main support level in the current bullish trend has been established around $140, which is quite far from this position. We believe that a positive turn in the current situation will bring the price around $200.

The trading volumes made another spike in the last days, during the sell-off process while the moving averages are moving closer to each other, showing that the market is moving at bearish levels.

Indicators

MACD index passed on the negative side, bringing more negative vibes in the market, minimizing chances for an immediate bullish turn. The RSI index moved at value = 50, indicating that the price will remain stable for the next period.

Bitcoin Cash / US Dollar

Another correction in the market became evident in Bitcoin Cash’s case. The price corrected from $700 to $450 in two days, losing 40 % of its value. The price rebounds today, reaching $550, following the dominant trend in the market, derived from Bitcoin’s trend.

The first minor support level in the market could be found in the $600 point, which was a previous local high level. This level broke down yesterday and the bullish trend will become evident again if the price managed to climb again at those levels.

Bitcoin Cash has been characterized as a weak market, with no strong fundamentals which are following the dominant trend from Bitcoin. We expect that the price will follow Bitcoin’s price formation with a mild approach, especially in the positive trend.

The trading volumes made the spike, just like all the other coins while the moving averages are getting closer to each other, predicting a change in the trend formation.

Indicators

MACD index moved even deeper in the negative area, showing that the market momentum will not help the price at this moment to surge at higher levels. The RSI index moved around value = 45, indicating that there are negative thoughts from investors, possibly driving the price at lower levels.

Correlations

Bitcoin / Ethereum = 0.69 (- 0.22), Bitcoin / Ripple = 0.53 (- 0.14), Bitcoin / Litecoin = 0.84 (- 0.07), Bitcoin / Bitcoin Cash = 0.76 (- 0.09)

The recent rebound move from Bitcoin made the market shakeup and deliver new relationships between the market leader and the rest of altcoins. The only coin that remained on the strong correlation zone is Litecoin, proving that its moves will probably follow Bitcoin’s dynamics for the next days.

Ethereum and Bitcoin Cash passed on the medium correlation zone, indicating that the price formation will be driven with a milder approach in this process. For last, Ripple has established its position in the medium correlation zone and it will probably move in an uncertain direction from this moment and on.