Over the past 24 hours, following a steep decline in the price of major cryptocurrencies, the crypto market added $12 billion to its valuation.
Within a relatively short span, the valuation of the crypto market increased from $115 billion to $127 billion as Bitcoin (BTC), Ripple (XRP), Ethereum (ETH), Bitcoin Cash (BCH), and many other cryptocurrencies recorded gains in the range of 6 to 12 percent.
Bitcoin Cash performed strongly, recording an 11 percent increase in price. But, its price still remains below the $200 support level at $180.
At the time, cryptocurrency traders and technical analysts including Alex Krüger said that a short-term bottom could have been established as BTC and ETH declined to new yearly lows. But, it is too early to call for a mid to long-term bottom and the beginning of a new accumulation phase.
“Think that was it. Impossible to know if a bottom is a short or long term bottom. Possible to sense once a major bottom may be in by looking at high frequency price bars and volume i.e. when the elastic is ready to snap back. If it swings 15-30% off the lows, that’s a major bottom in % terms.”
Since then, within a 24-hour span, the price of Ethereum increased from $98 to $113, by more than 7 percent. Bitcoin and XRP rose by 6 percent and 8 percent respectively supported by decent volume.
As BTC fell to $3,456, the volume of the dominant cryptocurrency remained in the range of $5 billion to $6 billion. As the price of BTC recovered beyond the $4,000 support level, the volume of the asset achieved $6.7 billion, mostly composed of new buy orders.
Don Alt, a technical analyst, stated that the market crash on Sunday was the most intense daily price decline the analyst has seen in recent years.
Given the intensity of the drop, the analyst stated that a recovery from $3,500 is more likely but if it drops below $3,500, $2,900 is expected to be the next target.
Bitcoin rebounded from $3,500 in the past 12 hours. But, there still exists a possibility that the asset drops to a new yearly low at $2,950, which would signify an 85 percent drop from its all-time high, prior to a proper recovery.
“The most insane dumping I’ve ever seen in crypto. I’ve outlined two possible daily zones that price could find support on, that said I still recommend waiting for the larger timeframes. They might give you a delayed entry, but they won’t chop you up,” Don Alt said.
The cryptocurrency market has experienced a solid short-term corrective rally and with major cryptocurrencies demonstrating oversold conditions, the market is primed to retain its momentum in the days to come.
A further drop below the current yearly low is still possible, especially if BTC endures another large drop before the end of November and affects the rest of the market.
Featured Image from Shutterstock. Charts from TradingView.