- Bitcoin downtrend stretched towards $13,000 amid widespread losses in the market.
- Ethereum revisited the crucial support at $370 after losing the anchor at the 200 SMA.
- Ripple has bounced off the support provided by the x-axis of a descending triangle.
The cryptocurrency market succumbed to another unexpected selloff on Tuesday during the Asian session. These losses that saw major cryptocurrencies like Bitcoin, Ethereum and Ripple drop sharply are likely triggered by regulation news from Hong Kong. The Securities and Futures Commission (SFC) said it would require all cryptocurrency trading platforms to be regulated.
The selloff extended to other crypto assets, wiping off approximately $17 billion from the total market capitalization. Currently, the entire market value stands at $384 billion, down from $404 billion, as recorded by CoinMarketCap on Tuesday. An increase in the 24-hour trading volume from $64 billion to $86 billion highlights the selling pressure's magnitude. US presidential elections are looming, bringing more caution and risk aversion to the cryptocurrency market.
Crypto market capitalization chart
Bitcoin bears regain control
The flagship cryptocurrency recently made a gigantic spike past $14,000, when it reached a new yearly high of $14,100. However, a reversal quickly occurred, which sent the king of crypto assets under the same $14,000 level. Instability due to news regarding the regulation of exchanges in Hong Kong extended the lower leg below $13,500. BTC/USD also crossed beneath the 50 Simple Moving Average in the 4-hour range, opening the road to losses eyeing $13,000.
The ongoing declines are likely to retest $13,000, especially if the short-term buyer congestion zone at $13,200 breaks down. Glancing lower, the 100 SMA is in line to provide anchorage under $13,000, while the 200 SMA will cushion BTC from plunging to levels below $12,000. According to the Relative Strength Index (RSI), the path of least resistance is downwards, at least for now.
BTC/USD 4-hour chart
On the flip side, the bearish outlook will be invalidated if Bitcoin closes the day above the 50 SMA. Such a price action will encourage investors to hold still and stop panic selling. An increase in buy orders might create enough volume to support gains beyond $13,500. Besides, the TD Sequential indicator recently presented a buy signal in the form of a red nine candlestick on the 4-hour chart.
Ethereum holds firmly to the critical support at $370
Ethereum's correction from $400 sent the price back into a descending parallel channel formed on the 4-hour chart. The losses also stretched below $380 and the 200 SMA. On the bright side, the buyer congestion at $370 remained intact.
According to the Moving Average Convergence Divergence (MACD), the path with the least hurdles is still downwards. Moreover, the broken support at the 200 SMA is now hindering the price movement. If Ethereum slipped below $370, losses to $360 would become apparent and bring the picture the lower support area of $340.
ETH/USD 4-hour chart
The expected downtrend would be thrown out of the picture if Ethereum closed the day above the 200 SMA. Additional price action past $380 might call for more buy orders, hence creating enough volume for a reversal to $400. However, buyers must be aware of potential delays in the recovery due to the resistance highlighted by the 50 SMA. Another hurdle to keep in mind is 100 SMA above $390.
Ripple extends the breakdown to $0.23
Ripple traded underneath a descending trendline since the rejection suffered marginally above $0.26. Several tentative support levels, including $0.25 and $0.24, tried but failed to stop the losses. The broad-based declines in the market on Tuesday refreshed support at $0.23.
The RSI shows signs of recovery after hitting oversold levels. XRP price action above $0.23 is expected to kick start a rally. The reversal's magnitude will depend on whether enough volume will be created from the current price level. On the upside, resistance is expected at $0.24, the 50 SMA and the confluence formed by the 100 SMA and 200 SMA.
XRP/USD 4-hour chart
On the downside, the descending triangle's support must hold to reinforce the buyer congestion area at $0.26. Traders should have it in mind that action under the x-axis might bring panic to the market, resulting in more selling pressure and more significant losses under $0.20.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
WIF price rallies 60% as Dogwifhat’s photo sells as NFT for $4.3 million
Solana meme coin Dogwifhat’s photo was purchased by web3 pioneer Global Coin Research as an NFT. GCR’s purchase likely catalyzed a rally in WIF, with prices increasing 60% on Monday.
Solana-based meme coin SLERF surges more than 3,700% as developer burns $10 million presale tokens
Solana-based tokens have dominated the meme coin narrative with nearly double-digit gains in the past week. A recently launched meme coin project called SLERF is making headlines for the “accidental” burn of nearly 50% of the token’s supply.
XRP price recovery likely catalyzed by upcoming lawsuit deadline and key events for XRP holders
XRP price wiped out its weekly gains over the weekend but managed to stay above $0.62 early on Monday. XRP price begins recovery on Monday as traders anticipate activity in the altcoin with upcoming events.
Crypto AI token rally persists, ignited by NVIDIA AI conference
NVIDIA AI conference, starting on Monday, is considered a key AI event as market participants await the unveiling of the next AI chip, B100. NVIDIA’s influence extends to the mining sector in crypto as its chips are focused on high-performance GPUs.
Bitcoin: Can BTC hit $100,000 without a correction?
Bitcoin (BTC) price shows a slowdown in momentum as it set up a new all-time high of $73,949 on March 13. Considering the massive uptrend that BTC has been experiencing, a short-term correction is nothing to be concerned about.