Wave of sales to start the week. Bitcoin slipped nearly 9% on Monday and once again fell below 200-day moving average (currently at $ 45,804.90). On Tuesday, the decline first continued unabated until moderate price stabilization settled in at the 20-week smoothing level at $ 40.455.
At around 7:28 a.m. CET, bitcoin lost 1.81% to $ 42,225. The day’s low was formed on the Bitfinex exchange at $ 40,281. Since early September, the world’s largest cryptocurrency by market capitalization has lost 10%.
Bitcoin’s losses also shifted the mood in the cryptocurrency market, as measured by the Fear & Greed Index, from “Neutral” to “Fear”. However, this is usually a counterindicator. If there is too much fear in the market, BTC may fall below the level at which crypto traders believe it should be rightly priced. Currently, the index is at 27 points. As soon as the index drops below 20, you can often expect a first floor.
Things look just as bleak for Ethereum and Cardano: ETH and ADA both lost a good 10 percent in yesterday’s trading and are now facing some important technical marks.
If the Ethereum price closes permanently below $ 3,060 / $ 3,075, a reversal formation in the form of SKS would be completed. This would translate to a potential downside of around $ 1,000. In this case, the target price is $ 2,025.
Ethereum is currently trading at $ 2,994.
Cardano is also at an important crossroads. If it slips below $ 2.03, selling pressure should extend to the August 18 low at $ 1.87. Currently, ADA / USD is trading just above $ 2.07.
Evergrande crisis, Fed meeting and debt ceiling weigh on risky assets
Crypto traders said uncertainty remains in the market due to the liquidity crunch at Chinese real estate giant Evergrande (HK: 3333), which is unlikely to be able to honor an interest payment of $ 83 million. of dollars owed on a bond Thursday. This, combined with the Fed meeting scheduled for Wednesday and the threat of a US default if no deal can be reached on raising the debt ceiling during October, has weighed on risky assets at the start of the week.
The S&P 500 slipped 1.7%, its worst day since May 12 of this year. At the day’s low, the broad stock index was 5% below its intraday high. It is currently 4.1% below its peak.
The Dow Jones index fell 614 points, or 1.8%, its biggest daily drop since July 19. The NASDAQ Composite was down 2.2 percent.
Investor nervousness is also reflected in the performance of the VIX: the fear index hit its highest level since May on Monday, and the ProShares Ultra VIX Short-Term Futures ETF (NYSE: UVXY) soared. 16.3% Monday.
The next test for the stock and crypto markets is on Wednesday’s agenda with the Federal Reserve’s monetary policy decision.
Investors are hoping for more details from board chairman Jerome Powell on the central bank’s plans to curtail its bond purchases, especially when it does. The Fed’s asset purchases are seen as the main driver of the recovery in equity and crypto markets seen from the Corona lows in March. Mr Powell said last month he expected the Fed to cut its monthly purchases by $ 120 billion later this year.
And given the ethical crisis the Fed is undoubtedly facing after it was revealed that two regional bank presidents, Robert Kaplan in Dallas and Eric Rosengren in Boston, actively speculated on stocks last year. – when the Fed adopted its emergency program which has led the stock markets to many records – the central bank is now under pressure to finally set a concrete timetable for reducing stimulus measures.
In addition to the decision on interest rates at 8 pm, the Fed will also publish its quarterly economic forecasts, as well as the “dot plot”. Mr. Powell will then hold a press conference.
Bitcoin – technical perspectives
The $ 40,750 area is key support for bitcoin and with a drop below, the upper reversal would gain significant outlines.
On the upside, the 50 and 200 day line barrier at $ 46,633.4 / $ 45,806.3 needs to be broken back on the basis of the closing price in order to let the chart-technical pendulum swing back in favor of the Bitcoin bulls.