After a wild week of crypto trading last week, let’s cover where these decentralized currencies stand right now and whether or not they will be able to recover from the heavy sell off that shaved trillions off the crypto market cap.
What seemed to have started with Tesla founder, Elon Musk, tweeting about discontinuing the use of bitcoin transactions until they figured out a way to reduce energy consumption, bitcoin and the rest of the crypto market tanked. On top of this, China also announced that they banned crypto transactions and mining, where about 70% of mining occurs in China. So, that was obviously some bad news for the global crypto market. An Ethereum co-founder also seems to be against his own market by saying the crypto market is in a bubble as well as expressing his hatred for Dogecoin. Last week was a span of bearish news overall for altcoins, but this week seems to have taken a break from all of the bearish sentiment.
After bitcoin dropped over 50% last week, price seemed to have found support in the $29-30K range which used to serve as a bottom from back in January of this year. On this 4H timeframe, a downtrend looks very clear, and a falling channel is marked within the two black lines. Right now, price is testing the channel highs with the previous 4H candle showing signs of topping out. If price can stay above the channel, it might be able find further upside during the week. If not, bitcoin can find support back in the $29-30K range.
From joke to legend amongst the meme and trading community, dogecoin surpassed a handful of publicly traded US companies by market cap before tumbling with the rest of crypto. Now the pair is in a similar down trend channel like bitcoin, but seems to be trying to near the top trend line once again as price consolidates in the low $0.30s. Doge also made a higher low on this 4H timeframe which could be a signal of the start of a reversal to the upside.
Taking a look at he 1D chart for Ethereum, price came real close to its 200 DMA before turning to the upside. ETH is currently above support around $1990-2040 range and is up about 21% for the day. Around $2641 looks like some more resistance since previous highs hit that level twice before breaking above. That looks like a major level to break now, and a close above would suggest a higher low on the daily chart.