Last week, panic gripped the cryptocurrency market as Bitcoin (BTC) fell below support, stablecoins were removed from the dollar and LUNA dropped to zero. This massive drop had a much greater impact on major cryptocurrencies like Bitcoin (BTC), Shiba Inu (SHIB) and Ethereum (ETH) than the “Black Thursday COVID” crash. As Kriptokoin.com, we are transferring the details.
Cryptocurrency market lost more value than Black Thursday
The leading cryptocurrency Bitcoin suffered massive price losses, while altcoins suffered hard losses. Even stablecoins pegged to the dollar were completely shaken. UST strategically attacked the stablecoin’s dollar rate, causing an algorithmically driven liquidation of reserve assets containing BTC, causing a domino effect. Bitcoin has fallen from support and many altcoins have reached a total drop of 80 to 90 percent or more. LUNA, an UST-linked entity, has dropped completely to zero. Billions were wiped from the total crypto market value. These developments have greatly increased the number of those who doubt about the future of crypto.
Comparing the last crypto sell to Black Thursday, the weekly RSI has reached even more extreme oversold levels. When we compare ten crypto sells to Black Thursday, the weekly RSI has reached even more oversold levels. Meanwhile, the Black Thursday candle is down 50 percent, while the latest correction barely produced 30 percent. By definition, a hidden bullish divergence occurs when an asset’s price sets a higher low, but the indicator sets a lower low. This usually indicates continued progress.
Another wave of crashes for major cryptocurrencies like BTC, SHIB, and ETH?
Elliott Wave Theory may provide clues as to what its sequel might look like in the future. The total cryptocurrency market cap is also trading in a parallel channel where it just touched the bottom. The upper limit of the channel is roughly $10 trillion. While this is the real hope the bulls need right now, the bears may still be the one having the last laugh. The weekly RSI index has now hit its lowest level since the bottom of the bear market and the fourth lowest in its history on TradingView.
Two of the previous three lows identified on the weekly RSI were bear market lows. However, the remaining low was followed by a 45 percent drop to the recent low. Another 45 percent drop from here would push the total crypto market cap back to around $600 billion, or below the January 2018 cycle peak. Simply put, the risk is still extremely high, but the greater the oversold conditions, the greater the potential for reward. Act accordingly.
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