After a week of growth of the cryptocurrency market, the new collapse threw bitcoin and the main cryptocurrency to the levels of February 18.
At the time of publication, the Bitcoin rate dropped from a local maximum of about $ 4,200 to $ 3,750 and stabilized around this level. The total capitalization of cryptocurrency in a few hours fell by $ 12 billion – from $ 141 billion to $ 129 billion. At the same time, on Sunday there were no events that could have such a dramatic effect on prices. Some experts suggested that Bitcoin’s inability to overcome the $ 4,250 mark led to technical correction of most cryptocurrencies, after which the market again entered a stage of uncertainty.
For example, technical analyst DonAlt said that small market capitalized Altcoins demonstrate the last stage of a fall – in the near future it is likely that the market will continue to recover.
“All the bearish moods around the altcoins are finally starting to dissipate. Another recession should push its top and make the price attractive again. Strategies to stay away because of their low prices paid off. Here, patience is the key factor, ”he believes.
Previously, analyst Alex Kruger (Alex Krüger) explained that although Bitcoin has already reached $ 3,122 in graphical analysis, interest in the market is minimal, as evidenced by relatively low trading volumes in cryptocurrency markets.
“As long as the cryptocurrency does not overcome the critical resistance level at $ 4,200, it remains vulnerable to a fall of up to $ 3,000,” the analyst said.
According to DonAlt, investors might be too excited about the passage of $ 4,000 resistance.
“The main reason for which this happened was that the entire cryptocurrency sphere was overly agitated by technical resistance in combination with the expected Ethereum hardtop,” the analyst believes.
The price of Ether has risen by 60% since the beginning of February, in anticipation of the update of Constantinople, which was postponed, but should happen today, February 25th. In the cryptocurrency sector, investors often drop their assets after an important event – an update or product launch. The same thing can happen after hard forks, but this time the collapse of the whole market happened earlier, probably without any connection with hard forks.
Fundamentally hardfork and lower remuneration per block are “bullish” factors for ETH, as they reduce the potential negotiable asset offering. In the short term, this may have a negative impact on price dynamics.
Nevertheless, even after a sharp drop in the price of Bitcoin by more than 10% from $ 4,200 to $ 3,750, the fundamental factors of Bitcoin and most of the main cryptocurrencies remain strong.
Moreover, although the sudden drop in Bitcoin surprised investors, he finally overcame the $ 4,000 resistance level, which he struggled to do for several months.
Bitcoin approached the $ 4,200 milestone, which technically opens the first cryptocurrency to $ 4,500 and further to the $ 5,000 to $6,000 range.
“As soon as the price breaks through $ 4,200, it can quickly move to the top. Watching the levels. Key purchase level below $3,700. No more than $3,550, ”said Kruger on February 19.
At the beginning of the upcoming week, prudent traders should stay away from the market and expect to choose the direction Bitcoin will take. After the rapid jumps usually follows a consolidation phase, after which the price continues to move or unfolds. As long as the causes of today’s fall remain unknown, it is impossible to state with certainty the possibility of a quick recovery.