The Daily Cryptomenon
4th September 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 04.09.2020
“MAYDAY! MAYDAY! We’re going to…” The crash has already happened and things aren’t looking pretty for any of the Cryptocurrencies this Friday morning. We wake up to see that the market didn’t just crash, it nosedived past crucial supports and reached levels that it hasn’t seen in almost two months. We can truly and safely say that the bullish momentum that we had seen in the past month is truly gone. With that said, let’s find out what today holds for the Cryptocurrencies on September 4th, 2020.
Our Cryptocurrency trio - Bitcoin, Ethereum, and Ripple had run out of oxygen at the top of the mountain and were suffering from hypoxia as they couldn’t properly breathe. Although they seemed to be enjoying the atmosphere at the top, it seems that they just couldn’t make it and fell back to the very base. Bitcoin’s dive lower started at $11,400 where it tried to break above it but utterly failed, resulting in a fall of over $1,000 to reach $10,270. Ethereum’s fall from the mountain began around $450 where it tried to regain that level to make its way towards $500, but also failed leading it to crumble towards $370, before correcting only slightly. Ever since $0.3050 rejected Ripple from its upward movement, the resulting move was a severe drop that seemed to hold around $0.2670. This ultimately led to a move towards $0.2400 before correcting slightly to $0.2500.
Bitcoin (check out the chart below you’ll find that Bitcoin is the purple line) falls from grace as it turns negative after being in the positive lane for so long, currently, it’s printing a performance of -8.71% on a month-to-month basis*. Ethereum (red line) has also turned negative, which is quite surprising considering the amount of positive pressure that we’d seen around this Cryptocurrency as it prints a performance of -1.17% on a month-to-month basis. Ripple (orange line) continues its descent into darkness as we spot a performance we hadn’t seen since June with a -19.43% 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 August till the 1st September.
What’s the strategy you’re going to use when it comes to these cryptos? Have the Bears finally taken over the Cryptomarket? Or is this deep correction expected and a jump from the Bulls is on the way? Whatever you choose to believe, you can react to it all on CryptoAltum.
Bitcoin falls to $10,000
Bitcoin has finally given in to the selling pressure of the Bears as it plummets below the $11,000 to reach $10,000. However, this time, the fall was nothing compared to what we’ve had in the last two months. From highs marginally above $12,000, Bitcoin initially found a pit stop at $11,100 (a popular support area in August). Recovery was immediate but the flagship Cryptocurrency failed to break above $11,500.
The freefall from the failed attempt to break above $11,500 was fueled by the fact that buyers were exhausted from the lack of sustained price action above $12,000 for almost a month despite their effort. In addition, trading at a lower price sometimes helps new buyers to enter giving the asset (BTC) a formidable push upwards supported by volume.
The RSI (Relative Strength Index) is printing deep into oversold territory, this tells us that there’s going to be a correction higher, but with previous supports that now turned into resistance, it’s hard to expect a major move higher. The Bulls are going to have a hard time moving past any kind of momentum, especially in the current market conditions. For the Bulls to regain the status quo between them and the Bears, the $11,000 needs to be overtaken before any kind of positive momentum can be established, otherwise, we can expect even stronger bearish pressure to continue.
Ethereum Buckles Under the Bearish Pressure
Ethereum has succumbed to the widespread selloff in the cryptocurrency market. This bearish wave wasn’t selective; it affected both major and minor coins. Prior to the drop, ETH had climbed to new yearly highs around $490, as it looked at bringing down the seller congestion around $500 before continuing higher to its ultimate goal at $1,000.
However, the losses from Wednesday have been grand in their own measure. The $420 support level held the downward spiral on the first run downwards, but the walls were broken after that as they crumbled when ETH tested that level again allowing the Bears to extend their legs below $400. From there, the movement lower continued but managed to bounce off $370 to currently trade around $386.
Being to establish a higher support, preferably at $380, is likely to encourage buyers to shift their focus to $500. According to the technical picture, Ether is surrounded by sloths of Bears. It’s safe to say that it’s going to be hard for Bulls to do anything without the Bears noticing and attempting to stop whatever move higher. The RSI is deep in oversold territory which proves just how strong the current bearish momentum is. The only way that this current momentum evaporates is if the Bulls are able to recapture the $400 level.
Ripple Falls Below $0.2400
Ripple has fallen below the massive support at $0.2400 for the first time since the Bull run that started back in July 2020. However, it wasn’t alone as you’ve seen how Bitcoin and Ethereum were affected. It only stood to reason that Ripple will follow in the footsteps of its cousins and fall into disarray. From the $0.2400, Ripple was able to jump back higher towards the $0.2500, at the time of writing, as it tries to establish a higher support for the Bulls to feel comfortable enough to try and regain what has been lost.
However, with the abundance of sellers in the market, an actual move higher is going to a steep uphill battle, one that might not yield any kind of meaningful upward trend. Looking at the composition of the Supports and Resistances, the scales seem to be tipped towards the resistance’s side meaning that Ripple will have a far easier route downwards than upwards. This signals that more downward pressure might be present on this Cryptocurrency.
The RSI is the same with Ripple as it is with Ethereum and Bitcoin, showing extreme oversoldness and bearish pressure. It’s clear that the markets are caught in the downward spiral of this bearish pressure and to get out would require a move back above certain resistances, a place where the Bulls can feel safe enough to use and push this instrument higher. In order to do that, the Bulls need to retake the $0.2550 as a strong support. The Bears, however, won’t let it go without a fight, so it’s going to be interesting to see what’s going to happen.
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