In the past 24 hours, the crypto market has lost $23 billion, dropping from $217 billion to $194 billion, as major cryptocurrencies including Bitcoin showed a lack of momentum.
What Has Happened to the Market?
Without any exception, every major cryptocurrency in the market has plunged in value on August 14. Ether, the native cryptocurrency of Ethereum, reached its lowest point in 2018, breaching the $290 mark for the first time since early November, 2017.
Bitcoin Cash, which has performed relatively well over the last several months in comparison to other digital assets like EOS and Ripple, has fallen by 16 percent, to its all-time low.
EOS, Litecoin, Ethereum Classic, Ripple, and others recorded a drop in the range of 15 to 20 percent, triggered by a massive sell-off across major cryptocurrency exchanges.
Throughout this year, the cryptocurrency market experienced three large drops in its valuation, as Bitcoin tested the $6,000 support level in February, April, and June, in an interval of three months. Every time Bitcoin tested the $6,000 mark, it surged to the region of $9,000 to $11,000, only to fall back to $6,000 a month or two after.
While Bitcoin, the most dominant cryptocurrency in the market, did experience similar drops over the past six months, apart from June, it has not seen extended losses in the $5,000 region. Two months ago, BTC fell below the $5,700 mark, reaching dangerously close to the $5,500 support level. But, apart from that month, BTC has rebounded relatively well in the past.
This week, BTC has struggled to show any sign of recovery and momentum, despite recording a 6 percent decline in value while others have plunged by more than 15 percent.
Even with the dominance index of Bitcoin, which measures the dominance of BTC over the entire cryptocurrency market, surpassing the 50 percent mark, BTC has struggled to initiate a corrective rally and rebound to the $7,000 region.
Yesterday, CCN.com noted in its market recap that if BTC fails to sustain momentum in the lower end of $6,000, a drop to the mid-$5,500 range is inevitable.
“If BTC can demonstrate resilience and stability in the region of $6,200 and $6,500 throughout this week with strong volume, a recovery to $7,000 is possible in the short-term. However, if BTC falls below the $6,000 level, it is possible that BTC tests the mid-$5,500 level, similar to the prediction of cryptocurrency researcher Willy Woo,” CCN.com’s report read.
The probability of BTC declining to mid-$5,000 has increased in the past 12 hours, as BTC already tested the $5,800 level and recorded a weak bounce from the higher end of $5,000.
Where Does the Market go Next?
If BTC falls below the $5,800 mark and moves to the mid-$5,000 region, which is highly likely given the overly strong downtrend of the market, other major cryptocurrencies and tokens are expected to suffer significantly intensified movements on the downside.
Featured image from Shutterstock. Charts from TradingView.
Last modified: March 4, 2021 3:55 PM