On Monday morning, the cryptocurrency market awoke to a horrific sight, with the market reestablishing new year-to-date lows amidst an altcoin ‘cliff dive’.
Bitcoin May Have Sprained Its ‘Ankle’, But Altcoins Have Broken Some ‘Bones’
The cryptocurrency market remains on thin ice, as Bitcoin teeters above the ever so important level of support at $5,800, while altcoins threaten to drag the price of BTC down with them. At the time of writing, Bitcoin is down 1% on the day, falling to $6,250, which is only a small step down from the $6,400 level that was established during Saturday afternoon.
As reported by Ethereum World News, Jeff DeGraaf, a well-known Wall Street technical analyst, sees the ~$5,700-$5,800 level as a near ‘life or death’ line of support, where a move under that level could put the cryptocurrency market into a “game over” phase. DeGraaf elaborated, stating:
“Parabolic moves are notoriously dangerous for short‐sellers … Usually, a top develops that often appears as a descending triangle over months, with reduced volatility and little [fanfare]. Once the top is complete on the support violation, the security in question can often be considered permanently impaired or even ‘game‐over’. We are of course referencing Bitcoin as exhibit ‘A’ in today’s market.”
So the fact that Bitcoin has not broken through the $5,800 line of support can be a silver lining in a stormy market.
Although Bitcoin has remained relatively strong in the face of tribulations, altcoins have begun to suffer, metaphorically breaking some ‘bones’ on their way to new year-to-date lows. A majority of altcoins are currently posting losses of 5%, while some altcoins have had it even worst off if you can believe it.
Today’s bout of altcoin sell-side has led Bitcoin’s market dominance to rise to a staggering 52.5%, which is the highest it has been since December’s crypto boom as ‘digital gold’ briefly hit the price of $20,000 a piece.
Ethereum Falls Below $300 For The First Time Since November 2017
In this move downwards, one player stands out from the rest. Sadly, instead of positively standing out from the ‘altcoin crowd’, this is a case of Ethereum sticking out like a sore thumb. Ethereum unarguably had it the worse today, as it became the only top 10 crypto asset to fall by over 10% at an earlier point today.
As it stands, the price of ETH has just moved below $300, which is the first time it has been at this level since November 2017.
Over the past week, Ethereum has fallen by over 28%, while Bitcoin has ‘only’ posted a loss of 10%. With this devastating move downwards has led some to ask, “Why is the price of Ethereum doing so poorly in comparison to other altcoins?”
As reported by Bloomberg, this specific capitulation event with Ethereum has been widely attributed to a large sell-off with ETH funds raised by ICO projects. Biswa Das, who works at crypto hedge fund BloomWater Capital, commented on this occurrence, stating that the market is too fragile to take an ICO sell-off in the following statement:
“These startups are raising a lot of funds but they don’t have treasury management or enough cash management experience, so they’re selling too early and causing a lot of pressure in the market. It was fine last year but right now the market is so fragile that it causes a lot of pressure.”
While Ethereum has already been pressed down for months with this factor, Spencer Bogart of Blockchain Capital says it may be far from over, as there are still hundreds of thousands, if not millions of ETH that are still being prepped to be sold en-masse on open order book exchanges.
Nonetheless, it remains to be seen whether a drastic Ethereum downtrend will drag down the rest of market into icy cold waters, which may be ready to nip at the feet of cryptocurrency investors.