Within a 48-hour span, since December 5, the Bitcoin price has dropped from $3,913 to $3,678, by just about six percent.
Other major cryptocurrencies like Ethereum (ETH) and Stellar (XLM) have declined by more than 10 percent in the past two days. The Ethereum price has dropped from $112 to $101 while the Stellar price has declined from $0.15 to $0.13, by over 13 percent.
In the past 12 hours, the crypto market as a whole lost about $6 billion of its valuation as tokens lost on average around 10 to 20 percent of their value against the U.S. dollar.
Waves, Maker, Aion, Chainlink, and Theta, which performed significantly better than most of the small market cap ERC20 tokens in the global market, recorded steep sell-offs on the day.
Is $3,000 Bitcoin Unavoidable
On November 25, the price of Bitcoin (BTC) plunged to its yearly low at $3,456 as bears began to fuel one of the strongest sell-offs in all of 2018.
Prior to that, in October, prominent cryptocurrency analyst Willy Woo said that the dominant cryptocurrency will likely not reach a bottom until the end of the second quarter of 2019.
Woo said at the time:
“Putting together the blockchain view, I suspect the timing for a bottom may be around Q2 2019. After that we start the true accumulation band, only after that, do we start a long grind upwards.”
Based on the intensity of the downtrend of Bitcoin throughout the past two weeks, a drop to a new yearly low in the range of $3,000 to $3,400 seems unavoidable, especially if the volume of BTC is considered.
If the price of BTC is dropping at a rapid rate due to a significant surge in its daily volume, then it can be said that the drop occurred due to the entrance of new bears in the market. But, since late November, BTC and the rest of major cryptocurrencies have been free-falling with low daily volume.
On December 6, for instance, the price of BTC fell by nearly four percent on the day. Yet, its volume has actually declined from around $6 billion to $5.3 billion.
Some technical analysts including DonAlt said that the the support level of BTC is not strong enough and if it continues to fall below the support level, a drop below the $3,000 could be the the next target.
Closed below support, not looking too pretty. BTC needs to reclaim supports quickly otherwise. I expect it to go for the previous lows. If those don’t hold I’m looking at $2,900. There are no supports left on the daily, hope for a fakeout or SFP at the lows.
State of the Market
Currently, momentum oscillators are demonstrating oversold conditions of BTC at $3,700. In the short-term, the crypto market could experience a minor recovery from its low price range.
However, throughout December, if large market cap cryptocurrencies fail to breakout of major resistance levels, then BTC is likely to remain in the tight range of $3,000 to $4,000.
Featured Image from Shutterstock. Charts from TradingView.
Last modified: March 4, 2021 3:14 PM