US stock markets, gold, crude oil, and cryptocurrencies have been revised over the past week, showing that traders have taken profits across most asset classes. The total value of the cryptocurrency market has been revised from above $ 394 billion to a low of around $ 313 billion, a correction of nearly 20%.
The drop also led to a sharp drop in interest rates on open futures (Bitcoin), which fell by $ 653 million on September 3, indicating that many short-term professional traders were squaring their positions.
However, even after the fall, the trend of many of the major cryptocurrencies has not declined as they are still trading above their 200-day simple moving averages. Professional traders take a close look at this moving average and generally believe that if the price remains above it, the trend is still positive.
Usually, every sharp drop is followed by a retracement, because aggressive traders use the dip to buy. However, bears that failed the first fall sale await the sale at relief meetings. If the next low breaks through the lower of the recent lows, that could signal the start of a deeper correction.
On the contrary, if the bulls can protect the recent downturns and support yields, this means that the correction may end. All cryptocurrencies identified in this analysis are trading above the 200-day simple moving average and are struggling to recover from the recent contraction.
Since the correction was severe, traders should closely monitor price action before entering long positions.
Bitcoin / USD
Bitcoin has not rebounded sharply from the $ 10,000 level in the past three days, indicating that bears are being traded on every relief rally. This indicates that the sentiment has shifted from buying on dips to selling groups.
If the bulls fail to push the price above $ 10,400 and hold it, the bears will attempt to resume the correction. If the BTC / USD remains below $ 10,000, it will likely drop to the 200 day simple moving average ($ 9,078).
This is an important support that you should pay attention to, because if the price breaks and stabilizes below this level, then sales may increase. Next back support is $ 8,000 followed by $ 7,000.
However, if the pair breaks through the current level and rises above $ 10,625, it is likely to move towards $ 11,000. This is an important level to pay attention to, because if the bulls were able to push the price above this level, the decline is over.
The 4 hours chart shows that the bulls have prevented the price from staying below the $ 10,000 level, indicating that they are accumulating at lower levels.
If the bearers do not convincingly overcome the $ 10,000 support over the next few days, the likelihood of a sharp rebound will increase as aggressive bulls will buy and expect to hit the bottom.
A break or break in the $ 9835-10625 series is likely to initiate the next trend. Until then, trading in this area is likely to remain choppy.
ETH / USD
Ether fell and closed UTC during strong support at $ 366 on Sep 5th, a negative sign. Altcoin is currently trying to return to $ 308,392, just over the 100-day SMA ($ 304).
The bears will try to halt the rally to $ 377.053, the 38.2% Fibonacci retracement level of the last stage of decline from its 52-week high.
If the ETH / USD pair dips below this level and dips below $ 308,392, it might dip to 288. A break below this support would be very negative.
On the contrary, if the bulls manage to keep the price above $ 366 or if they manage to stop the next fall above $ 308,392, it will increase the probability of reaching the bottom. This will likely attract additional purchases that could resume this move.
The increasing moving averages indicate that this is only a correction and that the longer term trend is still up.
The 4 hour chart shows that the decline was steep and the bears were selling aggressively on reversing to the downside.