- The price of Bitcoin is at the strategic technical level, always looking for a bottom.
- The price of Ethereum joins the general selloff in the cryptocurrency complex, falling 30% from the top to the bottom of the correction.
- The price of ripples forms a symmetrical triangle but fails on the first breakout attempt.
The price of Bitcoin has fallen 27% in the past ten days, making it the biggest ten-day loss since the March 2020 collapse and the second largest since November 2018. Amid the strong sell-off, Microstrategy Incorporated announced that it had acquired “an additional $ 10 million in Bitcoin at an average price of $ 43,633, bringing the total holdings to 92,079 BTC for $ 2.251 billion with an average price of $ 24,450.” “
China clamps down on crypto transactions, citing price volatility
Today, China instituted a new ban on financial institutions and payment companies from providing services directly related to cryptocurrency transactions and specifically warned Chinese investors about the dangers inherent in crypto trading.
Banks and online payment channels cannot offer any services related to cryptocurrencies, such as registration, clearing, trading and settlement. Additionally, institutions may not provide cryptocurrency products, savings and collateral services for cryptocurrencies. The ban does not prevent individuals from holding cryptocurrencies.
Industry organizations behind the ban, the China National Internet Financing Association, the China Banking Association and the China Payment and Clearing Association, stressed the dangers of exposing wealth. personal to the volatility of cryptocurrencies, citing how easy it is to manipulate digital tokens. and the perceived lack of underlying value.
Recently, cryptocurrency prices have skyrocketed and fallen, and speculative cryptocurrency trading has rebounded, severely undermining the security of people’s property and disrupting the normal economic and financial order.
It’s not the first time that China has instituted a cryptocurrency ban, but the timing is interesting. This is one of the clear examples of how countries are still struggling to integrate cryptocurrencies into their regulatory framework and the unease about the sustainability of the market and the potential negative consequences for the stability of the financial system, in especially in times of high volatility.
Bitcoin Sentiment Indicators Reveal Crowded Trade, But It’s Oversold
According to the most recent Bank of America fund managers survey, 194 fund managers with $ 592 billion in assets under management believe that “long BTC” trading is again the most crowded trade. Previous spikes in crowded trades such as tech in September 2020, US Treasuries in March 2020, and the US dollar in January 2017 were loosely correlated with relative highs.
Bank of America Fund Manager Survey
“Long BTC” topped the list in January, just before the cryptocurrency rose higher, and in 2017, another time, the digital token rose.
The temptation is to jump on the bandwagon, but it’s important to note that sentiment indicators are a secondary instrument and not the basis for investment decisions.
The Alternative.me Fear and Greed Index, a sentiment index for BTC and other leading cryptocurrencies, has fallen to 21 so far, marking a level of extreme fear sentiment. A week ago the Index was in greed territory, and a month ago it was showing extreme greed.
This is the lowest reading since April 2020, but 10 points above the extreme fear readings reached in March 2018, November 2018, August 2019 and April 2020, suggesting that fear may increase further in the near term.
Indice Alternative.me Crypto Fear & Greed
Bitcoin price tests conviction levels
The price of Bitcoin is at a critical juncture as sentiment reaches extreme fear. The critical level is the convergence of the neckline of a head-and-shoulders high with the support framed by the January high at $ 41,986 and the February low at $ 43,016, and the Fibonacci retracement level of 38.2% of the advance starting in May 2020.
The expected target for the current BTC decline is the 50% retracement of the rally from March 2020 to $ 34,378, which coincides closely with the measured head-and-shoulders movement target of $ 33,400.
The lack of buying pressure at current levels suggests that the price of Bitcoin could extend the decline to the previously mentioned targets, likely in a panic sell that will culminate with a bullish hammer candlestick and a sentiment reading similar to April. 2020. Ahead of the target is the 200-day simple moving average (SMA) at $ 39,694.
BTC / USD Daily Chart
It would not be surprising to see the price of Bitcoin trying to bounce back from the current price level, given that it recorded the second largest 10-day drop since November 2018, and the relative strength index Daily (RSI) has now hit an oversold. state. Any bounce will struggle with the April 25 low at $ 47,044, but if successfully overcome bears should be careful as BTC could jump to the 50-day SMA down at $ 57,040.
Ethereum price holds key Fibonacci level
The price of Ethereum showed higher relative strength in April, as the cryptocurrency market saw strong sell-offs, laying the groundwork for a 120% rally from the April 18 low to $ 2,000. and the May 12 high at $ 4,384.
This month’s sales proved too difficult to overcome, and the price of Ethereum fell to the 38.2% retracement of the rally starting in late February, which is a 30% drop in six days.
If the sell-off in the crypto complex continues, Ethereum’s price will likely test the rise of the 50-day SMA to $ 2923 and the 50% retracement level to $ 2838.
ETH / USD daily chart
On the other side of the fence, if the price of Ethereum starts showing renewed relative strength as the larger market slips, it would mean that the smart contract token is gearing up for a test of the all-time high at $ 4,384. .
XRP price rebounds in slow market
XRP price has created a tough trading environment from the top of Avri, but charts are starting to clarify noticeable volatility in a wide symmetrical triangle pattern. Today Ripple tried to break free from the triangle but was quickly rejected.
XRP price must close above $ 1.76 to confirm a new bullish outlook for the international settlements token.
Immediate resistance upon the breakout will be the April high at $ 1.96, closely followed by the psychologically significant $ 2.00 and 61.8% Fibonacci retracement of the 2018-2020 decline to 2, $ 08. Combined, all three levels present a formidable challenge for the bullish XRP price narrative.
A successful rally above the $ 2.00 zone puts the price of XRP in an excellent position to test the 78.6% retracement of the 2018-2020 decline to $ 2.61, a 70% gain by compared to price at time of writing.
The potential for a positive resolution of the SEC’s case with Ripple, combined with rumors of an IPO following the deal, has led many investors to focus on the all-time high of $ 3.30. This year, other cryptocurrencies have proven that unprecedented highs can be a powerful magnet for the price.
XRP / USD Daily Chart
The bearish alternative for Ripple begins with a break below the lower trendline of the triangle at $ 1.30 and the Ichimoku cloud. Nonetheless, the decline could be limited by the tactically large 10-week simple moving average (SMA) at $ 1.16 and the critical value of $ 1.00.