Bearish Signals in Ether and Bitcoin
Pressure on US tech stocks was a big theme in US trading yesterday, dragging cryptocurrencies down. Crypto’s market cap adjusted 1.1% overnight to $ 2.05 trillion.
Bitcoin loses 2% overnight, up to $ 42.8K, and Ether loses around 1.5% to $ 3.3K. The other top coins are declining with much less amplitude, as investment fund darlings rather than crypto enthusiasts have been hit the hardest.
The Doge, which has become accepted as a form of payment for some (inexpensive) Tesla products, deserves a separate story. Some have noted that the goods for Doge sell even faster than for dollars. On this news, the coin adds 18% today at $ 0.20, near month highs.
This news is a good illustration of the continued penetration of crypto into corporate culture. On the other hand, Tesla won’t necessarily keep these parts forever. People will be more active by spending their investments in DOGE.
The technical view of ETHUSD is disappointing as the selling intensified earlier in the week as it again attempted to break the 200 SMA. The decline and consolidation below suggests a break from the uptrend formed in May 2020, when the pair consolidated above that line.
In a worst-case scenario, it could be a road to $ 1300-1700, around half of current levels. It is doubtful that in this bear market cycle, the price of ether will lose 95% of its peak, as it did in 2018, which could completely offset the 2020 rise.
No less worrying is the disposition of Bitcoin. A death cross is formed there when the 50 days fall below the 200 days. At the same time, the price is below these averages, which reinforces the bearish signal. Attempts earlier in the week to form a rebound are meeting more substantial sales, indicating additional pressure from sellers.
The bearish image of Ether and Bitcoin makes the entire cryptocurrency industry cautious in the short term. Individual growth stories, like DOGE, run the risk of quickly losing strength today when the overall backdrop turns negative.
This article was written by Alex Kuptsikevich, Senior Market Analyst for FxPro.