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Crypto Markets Dump in Panic, Chances of Correction Increase: Crypto Market Daily

2020.03.13 何, 颖

Crypto markets saw devastating drops starting Thursday, March 12, and continued to plunge overnight. 

The price of Bitcoin (BTC) dropped from around $7,300 to under $6,000 in the space of about an hour on Thursday, tumbling to a below $4,000 in the early hours of March 13.  

As of Friday morning, BTC has stabilized somewhat in the $5,000 range, still down almost 15 percent over the past 24 hours. 

Ether (ETH) also saw a sudden drop yesterday, losing its grip on the $200 mark and tumbling below $100 overnight. At press time, the second largest cryptocurrency has rebounded somewhat and is down a relatively mild 6 percent to trade around $130. 

BTC/USD Perpetual Swap

1H chart BTC/USD Perpetual Swap data. Souce: okex.com

After dumping to $3,800 — a 50 percent drop in value from the start of the week — last night, the price of Bitcoin has finally stabilized and rebounded back to the $5,000 range. Now, the short-term resistance positions are at $5,570 and $6,680.

In theory, the trend needs to correct after a major short-term drop. Although the current condition is oversold, it can still sustain if market panic is not digested over the weekend.

Bitcoin’s volume chart is showing a decrease in selling funds. However, the trend can reverse unexpectedly — as with the dump last night. Now it is important to wait for a longer period to be able to judge whether or not the trend will stabilize.

Before the two lines of the MACD (Moving Average Convergence Divergence) cross the zero line, the risk of the price falling further will always exist. 

Traders show pessimism, bottom price could be even lower

1D chart BTC/USD Perpetual Swap data. Souce: okex.com

BTC was affected by the continued weakening of fundamentals yesterday. Once the coin slipped below the $7,000 support level, it didn’t stop and continued to release selling volume. Within a few hours, the price fell back to around $4,000, and has now briefly stabilized at $5,000. 

OKEx analysts believe that although the price this week showed a weak pattern after the failure to test the resistance of $8,000, it is still rare to see a decline of nearly 40% within a day. 

This short-term waterfall decline is often because of panic as a result of the outbreak. As far as the current situation is concerned, the sign that the decline will stop is not yet obvious. The hour-level “bottom” funds are limited, which proves that most investors are still expecting worse in the future and their willingness to buy is not strong. 

In the short term, we recommend paying attention to whether the price can reach a new low. If it falls below $3,800, it may continue to test the bottom area of ​​early 2019. The stable side that appears at the daily level may form a bottom and then rebound. As market sentiment has not yet stabilized, there is still significant risk involved.

Resistance and support levels

  • Short-term Resistance: $5,570       
  • Medium-term Resistance: $6,680
  • Short-term Support: $4,590
  • Medium-term Support: $3,800

ETH/USD Perpetual Swap

1H ETH/USD Perpetual Swap data. Source: okex.com

ETH fell below $100 yesterday and was close to the historical low of $80. The bulls quickly replenished and pulled the price back above $120. At press time, the coin is following an upward trend, trading just above $130.

There is strong resistance around $145. Active selling showed an obvious contraction. If the price does not break below $100, the probability of entering a consolidation trend is high.

OKEx analysts remind investors that if trading activities can keep at a low level over the next few days, it’s a signal of the dump stopping — stabilizing for just a few hours or even a day cannot ensure that the bearish period is over.

It’s a good chance to enter a small short position if the price continues to fail to test $145, while setting a safe stop-loss around $150. Breaking $145 could mean entering a long position if the first callback stabilizes on it.

Resistance and support levels

  • Short-term Resistance: $150      
  • Medium-term Resistance: $145
  • Short-term Support: $94          
  • Medium-term Support: $86

Trader’s choice: TRX/USD Perpetual Swap

4H TRX/USD Perpetual Swap data. Source: okex.com

TRX created a new low around $0.006 and is now rebounding back to $0.01 temporarily. 

The first effective resistance level is near $0.01080 as it’s a relatively weak one Breaking this position can’t guarantee anything, but rising back to $0.01200 is a stabilizing signal. 

With the decrease in trading volume, it’s hard to fall below the previous bottom. More funds are likely to build positions around here as the new low will be a suitable mentality price. 

The MACD indicates that a golden cross is going to form in the next few hours. This is a good signal to bulls, however investors should focus more on the resistance upwards — the risk of falling will still exist if the crucial price is unbreakable.

Resistance and support levels

  • Short-term Resistance: $0.01080 
  • Medium-term Resistance: $0.01200
  • Short-term Support: $0.0081    
  • Medium-term Support: $0.068

Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involve significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.

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