The Daily Cryptomenon
8th October 2020
Your daily Cryptocurrency Market Analysis News brought to you by the CryptoAltum Cryptomenon Team.
This analysis was written at 9:00 am GMT +3, on 08.10.2020
After that bit of volatility that hit the Cryptocurrency market, it would seem that things have died down. In the previous posts, we had explained how the market was acting with many Cryptocurrencies having wild movements higher and lower. But now that things have died down, we could be on the verge of a bit of consolidation. With that said, let’s find out what today holds for the Cryptocurrencies on October 8th, 2020.
The battle between the Bulls and the Bears continues. After the stint of volatility that happened where we saw both Bears and Bulls have a chance to drive the market, it seems we’re reaching a stand still with both spirit animals in a standoff, waiting for some other move. Our Cryptocurrency trio - Bitcoin, Ethereum, and Ripple - find themselves trading in their ranges as there wasn’t much action in the overnight scene. After Bitcoin failed to break above the $10,800 and the recent bounce from the $10,500, it seems that it has found a consolidation place around the $10,640. While Bitcoin was battling resistances and supports, Ethereum was battling the 100-SMA (Simple Moving Average) on the 4-hour chart. The Cryptocurrency had to break above this line and the drop towards $332 is evident, but the $330 support remains intact, meaning there’s still a chance for another move higher. After Ripple failed to break above the $0.2600, it was forced downwards, however the 100-SMA on the 4-hour chart was able to keep the Cryptocurrency in check where it currently trades around the $0.2450 with a bit of a downward bias.
Bitcoin (check out the chart below you’ll find that Bitcoin is the purple line) seems to be hitting a stable performance as it records a 3.21% on a month-to-month basis*. Ethereum (red line) is the worst performing Cryptocurrency out of the three as it records a -2.51% performance on a month-to-month basis. Ripple (turquoise line) continues to consolidate at the current levels with a performance of 2.45% on a month-to-month basis.
*Please note that we mention month/on/month we mean the same day, one month ago. For example, 1st September till the 1st October.
What’s the strategy you’re going to use when it comes to these cryptos? Will volatility return to this market in the near term? Or will the market be stuck with consolidation for the time being? Whatever you choose to believe, you can react to it all on CryptoAltum.
Bitcoin’s Next Break to Set the Tone
Bitcoin is currently exhibiting a confusing price action, reeling from the slew of negative news but withstanding a fall back to retest lows. Eventually, the stalemate between Bulls and Bears will break, and an enormous decision-making move will be the result. Expect that the trend and grand stage for the crypto market for weeks to come will be set the way Bitcoin breaks next.
The leading Cryptocurrency by market cap has shown incredible resilience in recent weeks, facing news that would have sent prices tanking, given the prevailing bearish market. But support at $10,500 has been holding strong, making the seven consecutive tests of $10,000 seem like a distant memory. Meanwhile, Bulls have been unable to generate enough momentum to push prices back beyond $12,000 where local 2020 highs were set.
All at the same time, volatility is dropping and the trading range is tightening, suggesting a large, decisive move is coming soon enough. According to one of our CryptoAltum Analysts, whatever direction Bitcoin price takes next, it will decide the trend for “coming weeks.” The current breakout range for confirmation of trend change or continuation is roughly $1,000, stemming from $10,200 to $11,200.
Ethereum Testing Important Support
Ethereum is struggling to stay above the initial support at $340. Its immediate upside is capped by the 100-SMA on the 4 hour chart. Recently, support was established at $330, which gave way for price action above $350. However, the next key resistance at the 50% Fibonacci level of the last drop from $489 to a swing low of $229 remained untested.
The uncertainty in the price movement is not unique to Ethereum, as Bitcoin is also sluggish. The decentralized finance (DeFi) sector has bled a lot during this retracement period. Some tokens in DeFi have retreated massively with some correcting by more than 20%.
Looking at the resistance and support composition, the path of least resistance remains downwards. The longer the price stays under the 100-SMA on the 4-hour chart, the stronger the sellers become. On the other hand, exhaustion continues to engulf the bullish camp.
The bearish outlook is emphasized by the gradually sloping Relative Strength Index (RSI). If the trend strength indicator closes in on the oversold, the smart contract token would be on the way to retest support targets at $330 and $320.
Ripple Gets Ready for Swell
Swell is Ripple’s annual conference held by the American technology company Ripple. First announced in August 2017, it’s an interactive conference that brings together the top figures in the digital currency and blockchain worlds. In 2020, the event will be held virtually on October 14 and 15.
Previously, Swell has had a major impact on the price of the Cryptocurrency. Back in 2017, the price of Ripple went up from $0.17 to $0.278. Following that, XRP dropped to $0.191. In 2018 and a week prior to the event, XRP went up from $0.269 to $0.57. Immediately following and during the event, the price dropped to $0.375. In 2019, before the event, XRP trended horizontally $0.30 and, following the event, it crashed to $0.217.
Currently, XRP’s upside potential is severely limited by the resistance at $0.2500, which has already rejected the price twice. As we have seen, XRP tends to fall during and after the Swell event. With these repeated rejections, we can expect XRP to break below the 100-SMA support and fall towards the Bottom of the Range at $0.2200.
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