Cryptocurrencies staged a recovery yesterday following the massive fallout that occurred the day before. The top 100 cryptocurrencies all posted gains except for five, none of which have more than $130 million in market capitalization.
Cryptocurrency prices continue to follow market leader bitcoin. The post-fallout correction began early Thursday around the time Bitmain announced it said the bitcoin network was at a high risk of being split.
Bitcoin’s price recovered around from its $2,150 low yesterday to $2,521.28, but it is still almost 20% below its all-time high at $3,000.
Bitcoin’s Market Share Slips
Bitcoin’s market share fell to a historic 40% low, with Ethereum now above 30%, according to coinmarket.com. Ethereum’s recovery was stronger than bitcoin’s, moving to $372.79, gaining 13.82 points in the last 24 hours, almost fully recovering the 16.04 points in lost in the prior 24 hours. Ripple, a distant number three with a $10 billion market capitalization, posted one of the weaker recoveries, gaining only 3.78 points after losing more than 12% the previous day.
NEM, number four posted a 7.91 point gain after falling 17%. Litecoin, number five, had one of the healthier recoveries at 15.11 points, more than recovering the 7 points it had lost. Ethereum Classic, number six, gained 7.33 points after losing 13.77.
IOTA, number seven, posted the biggest 24-hour recovery at 18.77 points, but that was after suffering the biggest loss of all currencies in the previous 24-hour period, falling 36.5 points. Dash, number eight, the only other cryptocurrency with more than $1 billion market capitalization, regained 9.22% after losing 13.62%.
Total market cap today was $107.691 billion.
How Serious A Correction?
Bitcoin saw a massive drawdown of $850 since the all-time high on Monday. So far, the correction is actually pretty tame considering there was a $920 correction just three weeks ago, noted analyst Mate Cser.
Bitcoin looks bearish compared to Ethereum, Dash, and Litecoin, with the $2,450 level and the short-term trendline at $2,500 providing resistance.
Ethereum is likely to outperform bitcoin, even if the correction has more fuel in the coming days, Cser noted.
Ripple continued its consolidation during the correction, falling below the 0.22 support and testing the 0.20 level in the process.
Litecoin quickly recovered to the key $30 level once again, proving its relative strength against bitcoin, and the strong support below the current price. The coin is in a new uptrend after breaking out from the long-term consolidation pattern.
Market Correction Was Expected
Some observers have credited this week’s market correction to Bitmain’s announcement the bitcoin network is at a high risk of being split, but the correction has been predicted for several weeks.
Analyst Nicola Duke of Forex Analytix predicted big corrections for both bitcoin and Ethereum in late May. Duke said bitcoin could experience a 46.5% price correction at $2,800 after witnessing a record $2,791.70 high in late May. After reaching $2,800,
Duke predicted it would fall and reach as low as $1,470, marking a 46.5% drop from the late May price. The analyst expects the correction to be temporary, with the price recovering, and continue its upward movement through 2018. An analysis called the Fibonacci retracement examines the peaks through different periods of up and down movements to determine future asset prices.
Short-term traders are advised to wait until the correction runs its course and the short-term trend turns higher again, while long-term investors should prepare to add to their holdings heading towards the targets of the move and buying opportunities emerge.
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Last modified: March 4, 2021 4:57 PM