The crypto currency market was re-colored in red on Wednesday. All major digital assets suffered losses of 1% to 10%. Total capitalization of all digital assets in circulation fell to $ 111.4 billion from $ 113.5 billion on Tuesday.
There are no clear reasons that could explain the sudden fall. However, FUD around the Canadian crypto currency, Quadriga, seems to gain weight in the media and social channels.
For the bulls yesterday, the good news was Bitcoin’s hold above $ 3,500 at the end of the day. But the lack of upward momentum and relative silence in the news shows that Bitcoin is almost docile. And this is never good for investors looking for volatility and double-digit profits. Even the Forex market is becoming more and more tempting now.
For those looking for a rebound, a warning signal should be the fact that Bitcoin has not seen a large inflow of investor money at current levels. The lack of interest suggests that current valuations continue to be considered inflated.
How low is Bitcoin need to go to attract investors who stay away and those who want to finally act?
Bitcoin will have to break the $ 3,500 zone again to see a possible recovery in the second half of the day. We can expect Bitcoin to test for a short time the $ 3,661.2 resistance (January 28th high).
Failure to return over $ 3,500 will probably leave Bitcoin deep on red territory. Downside pressure and a break below the bottom of this morning at $ 3,404.5 are likely to bring the levels around $ 3,300 for the first time since mid-December. A clear breakthrough and convincing move below this zone may widen the drop to $ 3,200 and the low for 2018 at $ 3,177.
The bears also hit Bitcoin Cash ABC. At the time of my writing, the digital currency traded at $ 113.10, with a loss of 4.95% over the past 24 hours. Bears lowered the price this morning from the high of the day at $ 117.74 to the current low of $ 111.36.
For the upcoming day, going back over the high of this morning $ 117.74 should support a rebound up in the second half of the day. If this becomes the first resistance to bulls will be the yesterday’s peak at $ 119.77. A clear break above it will send the test price to $ 121.97 (early February high).
If the price, however, fails to break through the top this morning, we will probably see Bitcoin Cash ABC continuing to fall down. A clear breakthrough under the closest support of 111.36 – 110.80 could trigger further downside pressure for testing to $ 105.83. We should first see how the price will hold around this area before each refund.
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.