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Cryptocurrency market rebound dries up, alarmingly recalling 2018


20 September 2021

Crypto market capitalization has risen marginally, up 0.7% over the past seven days, showing a decline since mid-Thursday. The rebound in the crypto market after the collapse early last week is drying up. The cryptocurrency Greed and Fear Index was up to 50 on Thursday, having fallen to 48 at the time of writing. Being in the middle of the range, it does not give any overbought signals, leaving room for a moderate decline further down.

Bitcoin has failed to latch on to levels above $48K. Developing pressure on the price of the first cryptocurrency from current levels will confirm a downtrend, with sharp selling starting from increasingly lower levels. In April, these were values near $60K. In May, buyers speculators capitulated, failing to push the price above $55K. In September, it did not even manage to stay above $50K for long.

The short-term pressures are the quarterly futures and options expiration, with the greatest concentration near $50K, which the bears are now fiercely defending. Short-term traders should keep their focus on the $45K level. A drop under could trigger a capitulation in bitcoin – a fire that could quickly spread throughout the entire crypto market.

The pressure on bitcoin, however, is not limited to technical or speculative factors alone. S&P500 warned El Salvador of “immediate negative implications for it credit rating”, which officially made bitcoin a payment instrument alongside the dollar last week. S&P said such action could deprive the country of IMF aid programs and increase vulnerabilities for its banking and fiscal systems. Such news worsens the perception of cryptocurrencies among institutional investors, who have been the main driving force behind bitcoin this year.

For ether, the short-term turning point was the $3600 mark, the crossing of which attracted sellers, who have dominated the market so far, dropping the price to $3450. The attention here is worth paying attention to the $3000. A sustained fall below for the top altcoin risk triggers a sell-off across most of the crypto market.

The failure of top coins below 45k for BTC and 3k for ETH will reinforce the current situation from 2018 when a failed attempt to rewrite historical highs turned into a crypto winter that not all altcoins survived. Most worryingly, for cryptocurrencies driven by interest alone, this could prove to be a self-fulfilling prophecy.

#source

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