Weekly Market Analysis of Cryptocurrencies
We report the traditional weekly crypto market analysis based on the contribution by Aayush Jindal (Cryptonews.com). The analysis was made on September 4.
Bitcoin price failed to recover and there was an increase in selling pressure below 11,500 dollars. BTC declined over 1,000 and it even traded close to 10,000. The price is currently correcting above 10,200, but the bulls might face a strong selling interest near 10,380, 10,440, and 10,500. On the downside, the 10,000 support is a massive support. If there is a daily close below 10,000, the price might continue lower towards 9,500.
Ethereum price is facing a strong bearish momentum below 420 and 400 dollars. If ETH breaks the 375 support, it might even decline below 260. The next major support on the downside is near 350. On the upside, 395 and 400 are now barriers for a fresh increase. A successful daily close above 400 is needed to start a real recovery.
Bitcoin cash price is down -15.0%, and it broke the 250 and 240 dollars support levels. BCH tested 205 and it is currently consolidating near 225. On the upside, the price might struggle to recover above 235 and 240. The main support on the downside is near 405 and 400.
Chainlink (LINK) is down over -40.0% from its all-time high and it is now trading well below 15.00 dollars. The price tested the 10.80 support and it seems like the bears might test the 10.00 support zone. Any further losses may perhaps lead the price towards the 8.800 support.
XRP price tumbled below the 0.262 dollars support level. It even traded below 0.250 and tested 0.238. XRP is currently recovering, but it might face a strong resistance near 0.250 and 0.252. The main resistance is now forming near 0.255. On the downside, the bulls might fight to protect 0.235.
In the past three sessions, many small altcoins dived more than -20.0%, including SUSHI, YFII, AMPL, BAND, HEDG, REN, RUNE, QTUM, UMA, VET, BAL, ZEC, FXC, WAVES, ONT, RSR, ATOM, BTS, and ALGO. Out of these, SUSHI, YFII, AMPL, and BAND weakened over -30.0%.
Bitcoin and S&P 500 Correlation Grows
Fredrik Vold (Cryptonews.com) writes that after Sep. 4’s sell off “in both crypto and stock markets, major cryptoassets remain mostly in the red, although some green shoots have appeared and Bitcoin (BTC) miners sold less BTC.” However, US equity futures were mixed as traders were waiting for the August jobs report last Friday, suggesting that the crypto market might again follow US stocks as correlation gets stronger.
“The correction in stocks came after what has been a major bull-run in the US stock market since it bottomed in late March.
Also, while yesterday we saw miners moving unusually large amounts of bitcoin to exchanges, signs today suggest that the selling has slowed down, with miners once again accumulating BTC on a 1-day basis. According to data from ByteTree, bitcoin miners on the whole increased their inventory by 156 BTC over the past 24 hours, after cutting their daily selling of coins by around half since yesterday.
James Bennet, CEO at ByteTree, previously told Cryptonews.com that miners typically build their inventory during market weakness and sell into strength. As the price recovers, miners might start offloading their inventory again. “Miners want to get the best price for their bitcoins but still need to cover operational expenses. They are generally not long-bitcoin, but are market savvy,” according to Bennet.”
According to blockchain analytics firm IntoTheBlock, in order for BTC to reach USD 11,000 again, it has to go through 1.2 million addresses that previously bought 864,000 BTC”, Vold concluded.
Bitcoin Drop Since March Unlikely, Say Analysts
Omkar Godbole (Coindesk.com) writes that despite a slight bounce Friday Sep. 4 morning, some analysts don’t expect bitcoin to chart a quick recovery from the double-digit price drop over the previous two days. “Bitcoin fell by over 10% on Thursday to $10,006, according to CoinDesk’s Bitcoin Price Index. That’s the biggest single-day percentage decline since March 12 when bitcoin prices crashed around 40% amid a major sell-off across the equities markets. Other data sources such as Bitstamp even logged bitcoin as dropping a little below $10,000.
At the press-time price of $10,520, the cryptocurrency is down 18.59% from the recent high of $12,476 registered on Aug. 17. Similar double-digit price pullbacks observed in April and May were quickly reversed in a couple of days, a sign of buy-the-dip mentality. This time, though, a quick V-shaped recovery back to recent highs around $12,000 looks unlikely due to cryptocurrency’s increased sensitivity to traditional markets. “The worst may be behind us, but bitcoin can take days to form a good base,” crypto analyst Edward Morra, who called the market top at $12,000, tweeted early on Friday.
Matthew Dibb, co-founder, and COO of Stack, a provider of cryptocurrency trackers and funds, told CoinDesk that prices could drop below $10,000 if the global equity markets retrace.”Macro factors are currently at play, and bitcoin shows a higher correlation to global equities markets in this ‘risk-off’ period,” Dibb said. Indeed, sharp losses on Wall Street look to have accentuated the bitcoin price drop on Thursday.
Joel Kruger, a currency strategist at LMAX Group and macro trader at MarketPunks also sees scope for additional price declines on the back of risk aversion in equity markets. “The next key support comes in the form of the June low at around $8,900,” Kruger told CoinDesk in a Telegram chat. However, he still expects bitcoin will eventually realize its potential as a store of value. Additionally, activity in the bitcoin options market suggests investors are adding bets to position for an extended decline in the cryptocurrency.”