The bears seem to be taking control of the crypto markets as Bitcoin and altcoins, including Ethereum and XRP, are losing heavily to wipe out all the last week’s gains. But technical indicators suggest good days ahead of this market correction.
Bitcoin which was on an upswing last week took the beating on the weekend. The Bitcoin price nose-dived below $10,000 levels on Sunday, February 16, losing more than $300 in an hour.
Having broken this crucial support, the world’s largest cryptocurrency looks under selling pressure correcting further. At press time, Bitcoin is trading at $9,803 with a market cap of $178 billion. With its price crashing over the weekend, Bitcoin has swept all its last week’s gains.
Last week, Bitcoin and the overall crypto market surged after Federal Reserve Chairman Jerome Powell praised cryptocurrencies and the blockchain tech. The crypto market reacted positively after Powell said that digital currencies can be a threat to the USD.
But along with Bitcoin, the overall crypto market looks in red today. In fact, Bitcoin has limited its drop to under 3% while all other top-ten cryptocurrencies have lost around 8-10%. Thus, despite the fall on weekend, Bitcoin dominance has surged 1% up taking 63.5% of the overall cryptocurrency market cap.
The Relative Strength Index (RSI) for Bitcoin is moving towards average which indicates the chances of falling prices. If Bitcoin fails to hold the RSI 50 levels, it can further fall below $9700 levels. If we have to see the bull pointers, the moving averages are keeping the hopes alive. The 50-day SMA is crossing the 200-day SMA which indicates a bullish sign for the medium-term technical chart. Any trigger of the BTC price above $10,000 can set the next target as $11,000.
Another indicator called the Fear and Greed Index has dropped from 64 to 59. This means that the market sentiment is currently greedy and any multi-week rally above $10,300 shall be followed after some correction.
Altcoins Drag the Market Downside
As stated, altcoins have dropped massively today dragging the overall crypto market downwards. All of the top-ten altcoins have lost nearly 8-10%. This has wiped out all the market gains for the last week. In this correction, the overall cryptocurrency market cap has lost $25 billion in just the last 24 hours.
Ethereum has lost around 7% in the last 24 hours. Now the ETH price is $250. At the same time, the losses of XRP are close to 10%. The XRP price is $0.28 which is still significantly higher than a few months ago.
In another positive development, a senior advocate of Donald Trump‘s government has proposed to exclude several assets from investment tax. This can possibly fuel more investments coming in traditional stock markets as well as the crypto markets.
The member has proposed introducing a general savings account which can take care of the healthcare, retirement and education savings under one umbrella. Besides, all investments done through this account and the profits derived shall remain tax-free.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.