The Fear and Greed index also dipped at an amazing speed to very low levels not witnessed since April 2020. All of this came just days after Elon Musk's Tesla released a circular informing the public about their indefinite halt in accepting BTC as a form of payment due to the adverse impact on the ecosystem.
Word around town is that the United States's SEC has also started an investigation into Binance Exchange. This, and the new directive from Tesla, coupled with the weak technical display of BTC for weeks has probably made traders quite anxious about what all of this means for the crypto market.
In the midst of all this, crypto whales have continued to send crypto to, and sell from, their exchange wallets at a higher rate than usual according to Ki Young Jun, the CEO of Crypto-Quant. The short-term bearish pull will not be over too soon although renowned analysts believe that a bounce back is already happening and "BTC is holding up well". The short-term fate of the BTC/USD pair is far from certain, but how is the long-term picture looking?
BTC/USD weekly chart. Source: TradingView
The pair has tried to continue its uptrend rally, all to no avail despite the bulls buying on the dips. The effect seems minor and unable to hold on signify that there is less demand at higher price levels.
The weekly exponential moving averages aren't left out of the bearish impact. The 20-week moving average ($47,444) is forming a flat trend, with the RSI showing signs of a decline in momentum by making a negative divergence.
If the bulls can exert enough counter-pressure, they can correct the dip towards $60,000 and above, from where it can continue its upward journey to the 161.8% Fib extension height ($80,803).
However, the pair could continue breaking downwards after completing its head and shoulders pattern targeting $28,939 just above the 50-week moving average ($27,335)
Indicators
MACD is negative and both averages are convergent, having stayed in the negative area for a while, showing that sentiment is with the bears. The RSI is at 32, and pretty close to the oversold section. Normally, an asset like BTC will be forced to rebound soon and hopefully that is the case.
ETH/USD
The bull on the ETH/USD pair also stalled following the BTC dip. After going strong for weeks and reaching All-Time High multiple times the bulls seem to be slowing down a bit, although there is still some indication of a buying frenzy which may be short-lived.
ETH/USD weekly chart. Source: TradingView
At current levels, the bulls are likely to be met with stiff resistance. Currently, the bears have been able to successfully drag the pair below the 161.8% Fib extension level at $4,052 with the pair trading at $3,282 at the time of writing. If the pair continues downward, it may find the next strong support level at the 38.2% Fib retracement level ($3,195) where the bulls are also likely to fight back by buying the dip with hopes of resuming the upward rally.
If the bulls are able to pull it off, the pair could rally all the way up to $5,000 from where it's next target will be the 261.8% Fib extension level above $5,750. As expected, the bears won't lay low and if they're able to win the resistance then the pair may be heading towards $3,195 (38.2% Fib retracement level) from where it may extend the dip to retest the 50% Fib retracement level at $2,831 and possibly $2,467.
Indicators
The RSI rose above 88, and fell back down to 54, showing that the rally was over-extended in the short term. Considering the downward slope of the RSI, the pair may be heading towards the oversold section. MACD is forming a convergent trend that looks to be heading downwards for the first time in a while.
XRP/USD
This pair broke out from $0.78 and shot up to $1.96 within a few weeks, where it was met with heavy resistance and was also slightly affected by the drop a few days ago. This pair was one of the few that did not drop as rapidly as BTC did after Tesla's new development.
Currently trading at $1.51 the pair experienced a power tussle between the bulls and the bears which lasted for quite a while around $0.21 and $0.78 before the eventual breakout. Usually this should still serve as a strong support zone if the pair should retest those lows.
XRP/USD weekly chart. Source: TradingView.
Since the pair got close to $2, very strong volatility set in, and rightfully so, since it's very difficult to uphold a rally like Ether did especially when still trying to hit a new 52-week High. The volatility even caused a symmetrical triangle to form on the candlestick pattern between April 9th and 25th.
Further analysis seems to be in favour of the bulls coming out on top due to the 20-day moving average keeping a slightly upward slope and the RSI fluctuating mid-way but heading towards the overbought section. We may also witness a decrease in the pair's volatile movement followed by some tight range trading for a while.
So far, the pair has climbed back, and maintained above the 20-day moving average. If the bulls keep doing a good job, the pair could stay untangled from the BTC induced market dip and possibly start another rally to $1.76 and then $1.96. The bulls are most likely to meet resistance at that point once more, but if they are successful then they should get to $2.63 before any long pause.
However, the pair is still close to $1.20 from where it bounced off on May 13th, and if it should dip below this level the bears may be in the clear for $1 and breakout level of $0.78.
Indicators
RSI has been fluctuating in the mid-section, showing some form of equal uncertainty between the bulls and bears. Currently at 51, the trend is downward but will it keep going down? MACD histogram is still negative and the moving averages are still climbing down from heights of April 15th.
BCH/USD
This pair has been quite volatile and inconsistent with its highs and lows over the past few months. This could be the indication of a building uptrend, but the pair also took a part in BTC’s unexpected dip despite the fact that it showed signs of creating its own trend over a week ago while Ether was doing the same. Looking at the wicks on last week’s candles, it can be observed that most traders are still closing their long positions above $1,430 just like the week before that.
BCH/USDT weekly chart. Source: TradingView
The bulls are also buying the dip pretty well as seen from the long candle tails and the minor bullish struggle on May 13th and 14th that was quickly corrected. Having gone below $1,638 the pair could possibly fall below $1,000 in a few days.
The bulls have already shown great weakness after failing to hold above $1,113 today. Currently trading at $1,050 the pair could remain range-bound for a while before breaking close to the 50% Fib retracement level at $951.
However, if the bulls are able to push the price level back up to $1,400 then they might rally to $1,638 before meeting further resistance. A break from this level could start another rally going all the way up to $2,050.
Indicators
RSI is at 47, which shows a healthy demand and supply ratio. Climbing down from the overbought section, the pair may as well be experiencing heavy sell-offs. MACD histogram is currently negative and the moving averages seem to be converging and south-bound.
LTC/USD
The pair has been on a strong uptrend for the past few months and was consistent above the 20-day moving average ($308.28) before the recent dip that has sent it tumbling below the 50-day moving average ($277.01).
The 20-day moving average has faced downward and the 50-day average is already keeping a level head. Coupled with the fact that the RSI is moving downwards, the bulls seem to have lost the advantage.
LTC/USDT weekly chart. Source: TradingView
A week ago, on May 10th the pair surpassed its 2017 ATH to create a new one at $413.60. This was a positive bearing that the bulls couldn’t sustain long enough as they got dragged along with BTC’s dip and have been trying to counter the resistance but for that to happen, it will take a lot more buyers to stop booking at higher levels and continue buying the dip.
Currently trading at $275, the pair has been trying to sustain above the 50-day moving average after dipping below the $370 breakout level which was probably a sign of weakness. The pair hasn’t been able to climb back to the 20-day moving average level, but if it does, the bulls may be convinced to maintain the rebound and keep moving up to $370 which should look positive provided more bulls don’t start booking profit.
Indicators
The RSI here has been able to sustain above 50 for a while and even tested the overbought section twice within the time-frame, but not for long. MACD is also negative and the moving averages both seem to be heading back down.
Correlations
BTC/ETH: 0.83, BTC/XRP: 0.78, BTC/BCH: 0.84, BTC/LTC: 0.88
XRP has the lowest correlation figures, to tally with the price movement. LTC has the highest, and this may not be going lower anytime soon. Most altcoins are taking a loss, and to make matters worse, the report from most exchanges say that inflow of crypto is currently at heights not seen in years. Does this mean that the dip is not yet over? We can only wait and see, but from all indications and history the bulls always have a way of fighting back.
Even if the crypto market was to witness a sequel of what happened in 2017, then there is still hope for long-term holders who prefer the cold wallets.
Other altcoin that were able to chart a different course from BTC will have to battle with really strong resistance as most of the market sentiment is currently bearish, those that are able to still break-out with an upward trend will most likely take it a long way. We may not be far from witnessing some more altcoins retesting their ATH.
Key Notes
- BTC is currently trading at $42,405 after a failed recovery attempt.
- ETH is currently at $3,167 and struggling to continue its rally.
- XRP is at $1.48 being very slightly affected by the BTC dip.
- LTC is at $264 after failing to continue above its newly found ATH.
- BCH is currently $1,022 and fighting heavy resistance.
