Last Sunday turned out to be an extreme “bloodbath” in the cryptocurrency market. Bitcoin’s price fell by more than 8,000 USD in just less than an hour, thus extending the sell-off from Wednesday to over 14,000 USD. This means that in just four days, the BTC price has dropped by almost 22 per cent. Similar trends could also be seen in the quotation of other virtual assets. However, many of them have one thing in common: declines have stopped around specific support levels. What caused such drastic drops, and what can we expect in the near future?
Last Sunday, the cryptocurrency market was shaken by a rumour that the US Treasury Department may soon accuse a number of financial institutions of using digital assets for money laundering. Although some people do not consider this information reliable, the undeniable fact is that it was just a few minutes after the publication of the tweet on this subject that the cryptocurrency market popped up.
Looking at the Bitcoin quotations, we notice that as a result of the depreciation lasting for several days, the quotes of the oldest virtual currencies have slipped from less than 65,000 USD to less than 51,000 USD, where there is technical support. It was in its vicinity that the demand response appeared.
In the 4-hour interval, we will see that if the increases are lasting several hours continuously, the BTC price could rise to 59,400 USD. This is where the closest technical resistance level is located, and it measures 61.8 per cent Fibonacci corrections from the last downward move.
The current situation on the Ethereum quotation is also very similar; yesterday’s price has slipped to the technical support of 1,960 USD. This is where the greater demand response emerged.
Looking at the ETH quotations from the point of view of the 4-hour interval, we notice that here also the closest resistance coincides with the measurement of 61.8% Fibonacci corrections. In this case, of course, we are talking about a level of 2,310 USD, which we could expect to test soon.
There are no reasons for optimism on the XEM / USD chart. The NEM exchange rate hit the technical resistance area of 0.49 USD on Saturday, where there was an extreme supply reaction signalling a potential rejection of this zone. Unlike BTC, ETH and several other Altcoins, however, the declines in NEM’s quotes did not reach any significant support. Therefore, the downward trend may continue here in the near future, and the XEM / USD rate will drop to 0.31 USD.
We could also expect potential declines in the Stellar stock market. Although its rate rebounded yesterday from the technical support of 0.46 USD, subsequent increases have already reached the technical resistance area of 0.5675 USD and measure 50%. Fibonacci corrections. Considering the supply reaction around this zone, we cannot be ruled out that the resistance will be rejected, and the XLM / USD rate will return to declines, for which the actual range seems to be around 0.46 USD.
More comments on the cryptocurrencies described above and an analysis of several more can be found in the market review from Geco.one on Comparic Markets TV and the Geco.one website.
