On Saturday, Bitcoin crashed 15% in seven minutes. No news justified that action. As a result, many overleveraged positions were shooked. Some sources said that there were over $250 million in long liquidation in BitMEX alone. Bitcoin (+0.4%), which went as low as $8100 before a bounce, is currently at $8,666.9, Ethereun(+0.06%) went back below $190, Ripple (+0.55%) dropped below $0.19. Overall, most of the assets have lost about ten percent during the weekend movements. The bitcoin halving will take place in about 14 hours. Was this crash a front running action of a potential halving selloff? The below Heat-map image shows the total loss incurred by the different currencies and tokens during the weekend.
Fig 1 - 72H Crypto Sector Heat Map
The total market capitalization dropped from a high of $271.551 billion to the current $234.977 billion (-13.46%). That move was made with a 24H volume of $58.532 billion (+8,.25%). After this movement, the dominance of Bitcoin descends slightly to 67.36%.
News Sentiment Analysis
- Average BTC Transaction Fees Increased 300% Days Before Halving (Cointelegraph) +
- Chilling 32% crash prediction for S&P puts Bitcoin price rally at risk (Bitcoinist) -
- SBI Holdings CEO: Ripple Partners Could Help Pandemic Supply Chain (Cointelegraph) +
- Could Tighter Chinese Digital Lending Restrictions Pose a Threat to Bitcoin Mining? (Beincrypto) -
- Bitcoin strength: Bitcoin holds critical levels in the $8,000s boosting bull case (Bitcoinist) +
- Tokenized Real Estate Booms While Security Tokens Struggle (Cointelegraph) n
- Ripple Price Analysis: XRP Crashes 17% Following Bitcoin’s Bloodbath, Where To Now? (Cryptopotato) -
- Bitcoin (BTC) Price Records Biggest CME Gap Ever After Sunday Massacre (U-Today) -
- Crypto traders took a $1.2B hit during yesterday's 15% crash (Bitcoinist) -
- Coinbase CEO Says New Cryptocurrency Bill Would Have Major Impact on Future of Finance (The Daily Hodl) n
- A ‘much more severe’ selloff looms in the stock market, strategist warns (Marketwatch)
- China’s purchases of US goods will fall way short of ‘phase one’ trade deal due to the coronavirus, says think tank (CNBC)
- White House Covid cases contradict Trump's message on opening (CNN)
- Boris Johnson calls on UK to go back to work in plan to ease lockdown (CNN)
- US stock futures rise following back-to-back rallies on Wall Street (CNBC)
- Asian markets rise on hopes of global recovery (Marketwatch)
- Elon Musk Says He’s Going to Sue California Over the Lockdown. What That Means for Tesla Stock (Marketwatch)
- Oil drops 2%, snapping five-day winning streak in volatile trading session (CNBC)
Today's sentiment is mixed, as traders are still digesting Sunday's flash crash. Today's price action may be choppy and directionless, as investors try to find clues about the future direction of the market. Maybe the Asian and European stock markets could influence the crypto market positively. Asian stocks are up, with the Shanghai Composite SHCOMP sliding -023%), Tokyo's Nikkei 225 up by 1.04%, Hong Kong's Hang Seng's HSI gaining 1.46%, South Korean's Kospi easing -0.38%), Sydney's S&P/ASX 200 up 1.3%), New Zealand's NZ50GR up 0.6%, Singapore's STI slightly up by 0.42%, Taiwan's Y9999 up +1.02%) and Jakarta's JAKIDX up 1.08%.
Also, it is expected that European markets have a positive open. London's FTSE futures are up by 16 points, Germany's DAX-30 are up 97 points, France's CAC-40 is 29 points higher, and Italy's FTSE MIB is gaining 148 points.
Fig 2 - Total Market Daily
The total market price dropped to the bottom of the channel as a consequence of the market mini-crash it did on Sunday. The price bounced after piercing through the support area (shaded cyan) and moved to the current value of $234.8 billion. On the daily chart, we see the price is now moving in the midline of the Bollinger bands, as the RSI moved from the oversold region to the center of the range.
- Bollinger bands slope is positive +
- Linear regression channel points upward +
- Price above its 20- 50- and 200-day SMA +
- Price wiped all the gains made in May -
- Price at the mid-Bollinger line -
- 50-SMA below its 200-SMA -
- RSI moves down and is in the middle of the range -
Total Market Outlook
The technical factors indicate a medium-term upward trend, but the wounds inflicted by the mini-crash have sown many doubts about the sector’s future upswing. We expect a choppy action today.
Fig 3 - Bitcoin 4H Chart
Bitcoin fell to the bottom of the channel before bouncing off and move above $8,500. Now the price moves in a sideways direction near $8,700, below the -1 Sigma line of the Bollinger Bands, with the bands sharply turning down and the RSI close to oversold levels.
- The price is below the -1 Sigma Bollinger line and on the lower half of the regression channel --
- The Bollinger bands turned down and are widening -
- Price below its 20- and 50-period SMA -
- 200-SMAs has positive slope +
- The slope of the Linear Regression Channel is positive +
- Price rejected from $10,000 resistance -
- RSI close to oversold -
Bitcoin is short-term oversold, as evidenced by the RSI. We see that a lot of short-term technical factors point for downward price action, but it has bounced three times below $8,500, so this level still has the strength to hold the price. If this level is breached, we see Bitcoin could move down to test the $8,100 recent low. On the other side, there is a chance the bounce carries the price to a test of the $9,000 level. In less than 12 hours, it will occur the halving event, so be prepared for surprising moves today.
Fig 4 - Ethereum 4H Chart
Ethereum dropped from the top to the bottom of the short-term channel. This action made it to cross the mid-term ascending channel to the downside and also below the $200 level. The action now takes place below the -1 sigma line of the Bollinger bands, and the RSI is touching the 30-level. We see also that the price is currently touching the 200-period SMA, which is at risk of being pierced.
- Price below the -1 sigma line of the Bollinger bands -
- Bollinger bands turning down -
- Price well below its 50-SMA and trying to cross its 200-SMA -
- The price pierced through the bottom of the ascending channel -
- The slope of the linear regression channel is positive +
- The price still inside the short-term descending channel -
- RSI is still weak -
The majority of the technical factors have turned bearish, but the selloff is overextended. Thus, we think the price will consolidate around the current levels, and above $180. A test of the $180 and $175 levels is likely.
Fig 5 - Ripple 4H Chart
Ripple lost all the gains made in its last rally after the mini-crash on Sunday. The price is back below $0.20, but the $0.19 still holds. We see now that the price is below its 200-, 50-, and 20- period SMA, which is not good for buyers. We see it moving below the -1 sigma line of the Bollinger bands and below the lower side of the ascending channel.
- Prices below the -1 sigma Bollinger line --
- Price below the lower edge of the ascending channel --
- Bollinger bands pointing down and expanding -
- Price below its 20-, 50-, and 200-SMA --
- 50-SMA above the 200-SMA +
- RSI weak below the 60 level -
- 200-SMA turning down -
All technical indicators point to a bearish continuation. The only good news is that the $0.19 held. We think a new test of this level is likely today. If it does not hold, the $0.178 level is to be touched too.