Bitcoin and the broader crypto market were in red on Tuesday. So the downward start of the week was extended, with Bitcoin dropping by 1.38% over the past 24 hours, Ethereum crashed more than 2%. And the only coin of top 3 cryptocurrencies that rose or instead remained unchanged was XRP, with + 0.03%.
Some suspect this is a necessary correction after the gains during the weekend. After all, cryptocurrencies failed to hit new lows so far. Others suspect this is just a misleading rebound before we see further sales.
As I mentioned before, one of the theories on the market is that crypto whales, or big boys, are dumping digital coins to cause panic and sells to buy and re-accumulating from lower levels. Some believe that this moment of buying has already begun. However, even if the whales are not dumping further cryptos from their portfolio, they don’t buy them so hard at the moment.
For now, Bitcoin bulls are doing their best to prevent a break below $ 3,000. But with increased volatility and downward bias, the bearish movement seems more likely than returning to levels above $ 4,000. Only a clear break and convincing move above this level will give a positive signal to the bulls. Otherwise, it is entirely possible to see other sales up to $ 2,000.
Similar is the situation with Ethereum. The third-largest coin with the market capitalization of $ 9.4 billion is dominated by bearish moods that have captured the global crypto market. ETH/USD is traded lower today, at about $ 88.67, as traders are trying to figure out where to go from here.
On the front of regulations, the US Commodity Futures Trading Commission is trying to better understand the mechanics of digital coins, other than Bitcoin, and to differentiate the opportunities, challenges and risks posed by cryptocurrencies such as Ether. That’s why the CFTC is looking for public feedback according to the statement it made on Tuesday.
Technically, on the day the chart ETH/USD is supported by EMA 20, currently located at $ 87.70. A clear break below that level could extend downside pressure to yesterday’s bottom at 86.03. But critical support remains the bottom of Friday, $ 82.35. And just a convincing break below the psychological level of $ 80.00 will clear the bear’s way to $ 50.00.
On the other hand, the $ 100 level remains an essential resistance to bulls. Besides being around the psychological level, in the area around it is the peak of December 6 at 104.50 and the SMA 100 on a four-hour chart around 103. A convincing movement over this area is necessary to order to create positive momentum, so the next target of the bulls is in the field of 106.26 dollars (the middle line of the Bollinger Band indicator).
Still, keep in mind that the RSI indicator remains flat in oversold territory on the daily chart, suggesting that the recovery is not yet on our way.
Author: Silviya Velcheva
* The views expressed in this material do not constitute a recommendation or advice for the purchase or sale of cryptocurrencies in the digital assets market or other financial instruments. The predicted forecasts meet the expectations of the author of the material and may not materialize. Trading in currencies, contracts for differences on margin or cryptocurrencies poses a high risk and may not be suitable for all investors. Past results are not a guarantee of future success.