Since falling from $7,400 to $6,300 on September 6, Bitcoin has stabilized in the $6,400 region, providing the crypto market with a small breathing room.
Bitcoin has been fairly stable at $6,450 throughout the past 48 hours, recording a movement that has allowed tokens to minimize losses against BTC and other major cryptocurrencies.
Still, Edward Morra, a widely recognized technical analyst in the crypto community, has said that Bitcoin and the rest of the market are still on a clear downtrend.
From August 8 to August 26, for more than three weeks, Bitcoin had been relatively stable in the $6,500 to $7,000 region, demonstrating small volatility. However, from August 27 to early September, as Bitcoin started to see some major movements on the upside, the cryptocurrency market began to demonstrate extreme volatility.
As seen on September 6, the end outcome of the volatility in the cryptocurrency market was a massive crash for Bitcoin, Ethereum, and the rest of the market, deleting gains over the past month.
Considering the sheer speed in which the crypto market fell to its previous support level, Morra explained:
“I’m not really sure why some people are still bullish here, market clearly showed you the evidence of supply still completely dominating the place. Erasing 2 weeks worth of gains in 2 days. That’s failed rally, and this is a sign of weakness, not the spring.”
Morra added that the cryptocurrency market will have to see solid stability in the low price range before properly bottoming out and initiating a mid-term rally. But, BTC and ETH, along with other assets, have not shown any signs of stabilization in their low price range.
“Springs occur at bottom of the range, preferably on low volume. Instead, we got the most technical bearish 0.618 macro retest followed by record $1B 1h volume candle. That’s not bullish in any senses,” Morra said.
Previously, ShapeShift CEO Erik Voorhees said that the bear market is not over yet but the low price range presents a viable opportunity to invest in the cryptocurrency market. Even if BTC drops in the upcoming days, it is unlikely to see BTC testing the mid-$5,000 range.
But, as Morra emphasized, the market is not bullish and is not demonstrating any signs of mid-term recovery. As such, in this period, it is more urgent for major cryptocurrencies to remain stable in their low price range for weeks if not months to ensure the market truly bottoms out in the $190 billion to $200 billion range.
Against Bitcoin, tokens have recorded 50 to 90 percent losses over the past 8 months, despite the 70 percent correction in the price of BTC. Given the magnitude of the decline in tokens, the market will most likely show oversold conditions in the short-term.
Still, in the grand scheme of things, tokens present overly high-risk opportunities with insufficient returns, at least for now.
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Last modified: May 20, 2020 6:01 PM UTC