It was another chaotic weekend for the crypto markets. While football fans were busy watching the Manchester United and Liverpool game, a huge crash took place in the crypto markets that wiped off over $15 billion from the market cap. In other words, crypto markets are once again on the back foot to begin the week with a big hole to fill.
The crypto market cap started the year at $126 billion and reached a peak of $143 on February 24, before dropping back to $128 billion today. The key questions were what drove this move and whether the effect of JPM’s coin has vanished?
Well, the reality is there is nothing abnormal about huge moves in the crypto market over the weekend, mainly because of thinner volume and bigger order sizes. So, a move like this does not shake HODLERs’ foundation.
In fact, for them, it is more of an opportunity, as long as there is no substantial deviation in the fundamentals. Looking at the sentiment, it is only improving.
Having said this, bull traps are certainly set by bears and if you look into the price action for the crypto market over the last 24 hours, it may seem like a trap. It appears that the price was driven up by algos and bulls fell victim to this. But for me, this may not be true, there is more to this.
Speaking from a technical perspective, all top three crypto coins (Bitcoin, Ethereum and Ripple) have returned to their previous ugly price range. For Ripple, the critical level is $0.30. It needs to stay above this point in order to convince traders that the bull run has strength. Similarly, Ethereum’s price needs to stay above last week’s low at $125. As for Bitcoin, the critical number is the low of February 18th at $3,565.
Looking at the daily chart for Bitcoin, it becomes clear that the price is trading above the 50-day moving average, but still well below the 100-day and 200-day moving averages. This confirms that the bulls are still somewhat in control of the price and as long as it stays above the 50-day moving averages, the hopes are for the bitcoin price to continue its move higher.
