Bitcoin, Ethereum, Bitcoin Cash, Ripple, IOTA, Litecoin, Dash: Price Analysis, December 22
Although 30% down, the crypto market remains strong.
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Over the last 24 hours, the crypto market has fallen by more than 30 percent. There is a combination of events that might have triggered it. Litecoin’s founder selling all his coins in this rally is certainly a sentiment breaker. This might look like he believes the elevated levels were a good position to cash out completely.
While his selling doesn’t end the future of Litecoin, it certainly dampens the sentiment and we can see it reflect on the other cryptocurrencies as well.
Elsewhere, a large individual trader or a group of traders placed an options bet on the New York-based digital currency trading platform LedgerX, that Bitcoin will rally above $50,000 by end-2018. Right now, it seems to be an overly optimistic assumption. However, anything can happen in a year’s time. If someone had told me in January 2017 that Bitcoin will climb close to $20,000 during the year, I would not have believed it.
Nonetheless, the bull market tops out when the sentiment is overly bullish, especially with the retail traders. Using the Wayback Machine, we find that the whales have been trimming their positions, while the smaller traders have been piling on Bitcoin over the period of the year. Professional’s selling is never a good sign.
Though in the past year, every fall has been a buying opportunity and the aggressive bulls have made a lot of money, we believe that, now, the traders should wait and not venture out to buy until we see some semblance of a support forming.
But won’t we miss out buying at lower levels?
We may! But, we will also sleep peacefully and enjoy the holidays without any major worry, should the cryptocurrencies extend their fall.
We have not traded in Bitcoin for a while because we did not get the right setup to enter. Though we missed out on a large uptrend, at least we did not get caught in the frenzy. To the lucky few who are owning Bitcoin, we have warned in our previous two analysis reports that the cryptocurrency is at a risk of breaking down.
In our previous analysis, we had warned that if Bitcoin failed to rise above the trendline, it will break below $15,200 and that is what happened. The attempt to rebound off $15,200 failed on Dec. 20 and today the cryptocurrency has plunged even below our expected support levels of $12,505.
We may find a number of aggressive bulls buy at the current levels of the BTC/USD pair and continue buying till the 50-day SMA of $11,000. However, we believe that we shouldn’t try to catch a falling knife. As the selling has been overdone, we may find a bounce soon, but, if it fails to sustain, it’ll break loose. We may see the fall extend to even $10,000 levels.
So, let’s wait for the correction to end before initiating any long positions.
The ETH/USD pair has a strong support at $500 and below that at the 50-day SMA at $455. If these also don’t hold, then the price will fall to $400 levels.
We suggest waiting for a few days until Ethereum forms a bottom. Currently, there are no buy setups on it.
Traders who followed us on Bitcoin Cash entered long positions at $1,520 and exited 50 percent positions at a handsome profit of $3,859 and the remaining posi