BOTS Crypto News week 21
Bitcoin experienced the bloodiest two weeks in its existence and fell to price levels we did not see since the beginning of the year. The total price decline measured from top to bottom was over 50% for Bitcoin and some altcoins lost over 70% of their value. Bitcoin recovered 20% which resulted in some relief among investors. Altcoins sold off harder as I just stated but bounced back more as well the last couple of days. The main question is: Are we out of the woods yet? Or is there more downside left? In this weekly update I will give my perspective.
By: Steven Eblé
Everything we discussed last week on Bitcoin about technical analyses got pretty much invalidated after the China fud came out earlier this week. A lot of people panicked and tried to sell their positions, longs got liquidated at the same time which resulted in liquidity problems on exchanges and thus a flash crash. Bitcoin tanked over 20% in a daily candle and some Altcoins dipped over 30%.
The support around the 40.000 US dollar mark could not hold as support which resulted in the next level being targeted. This level was the swing low of January 2021, or the lowest purple box seen on the image below. So far Bitcoin found support here and bounced over 20% which signals big buys around that level. What’s the next hurdle for Bitcoin to overcome you may ask?
Bitcoin is currently back in the rangebound construction between 40.000 and 30.000 US-dollar. This is also the range we were in earlier this year. You would like to see 30.000 US-dollar level hold or otherwise it might get bloody really quick because there is no support looking left. If 40.000 US-dollar gets broken 44.000 US-dollar is the next target in my opinion
For now I just would like to see Bitcoin stay in this range, accumulate above the 30.000 US-dollar level after which we can accel again.
Last week I also pointed at the importance of the bull market support band to hold for sustaining bullish momentum. Last week we were balancing just above it. When we broke down the bull market support band the selloff accelerated.
In my opinion this does not mean the bull market is over, but I will write another article about that later this week.
Ethereum took a beating, just as almost all digital assets earlier this week and fell to its old all-time high around 2.000 US-dollar. Ethereum declined more than Bitcoin this week but then also bounced back harder. As I discussed in the last update, Ethereum could not hold the uptrend after Bitcoin dropped so severely. The blue line that acted as support for weeks broke and was retested as resistance which signalled that bulls lost momentum.
The first support zone was around 3.200 US-dollar but this almost immediately got broken and selling continued, resulting in the second support level being hit which lays around 2.000 US-dollar. This acts as support for now which is a good signal.
If Bitcoin can stay in the range, we earlier discussed it is fair to assume that Ethereum can go back to the 3.000 US-dollar.
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