The news about cryptocurrencies last year or even a few months ago portrayed an overall optimistic analysis for the most part. Today, the picture is different, though. It wouldn’t be an exaggeration to say that Bitcoin plunged from the top it reached in November 2021. Ripple is not showing positive developments, either. The same applies for Ethereum, and many other altcoins which were considered attractive investments not so long ago. In short, cryptocurrencies do not seem to be waiting for a huge impulse upwards.
Yet, this should not deter traders and investors. Many cryptocurrencies are showing signs that they might decline further, and if you have proper strategy to trade such a decline, then the market has plenty of opportunities to offer. Trading cryptocurrency prices against the US dollar, for example, and leveraging those opportunities, is easy when you have a reliable broker such as easyMarkets. That’s why it is especially important to be aware of the situation of the top cryptos today.
Back in November 2021, Bitcoin reached a top at around 68890 BTC/USD. For many, this was a sign that the currency was on its way up to 100,000, a psychological level. Yet, what happened afterwards was the opposite. The cryptocurrency began to decline in price and today it is trading below 40,000 BTC/USD.
The daily chart shows that the decline is currently meeting support. This support is a slightly rising trendline that has not been broken in more than a year. Should the price go below this trend line and break it decisively, it would open the door for further declines until the next support level, which is a horizontal level at around 29000 BTC/USD. Traders are advised to wait for further signals and manage their risk and money well before entering a position.
The swings seen on the Ethereum chart are less pronounced than the ones on Bitcoin, although both display similar price action patterns. Ethereum reached a top at around 4800 ETH/USD in November last year, and it declined afterwards just like Bitcoin. The chart also shows a rising trend line that is acting as support for the currency. Breaking this line to the downside means there is more room to go downwards.
Ethereum is the second most popular cryptocurrency, and it has many applications especially in the blockchain sphere. Thus, the demand for it is still buoyed by the fact that several technological developments use Ether as a token. At the time of writing the price is trading around 29100 ETH/USD.
Yet still, speculation plays a key role in determining the price, and the relative correlation with Bitcoin is hard to ignore. It is recommended that traders wait for the price to go below the trendline before entering short positions. The next target will be the next support zone at around 1740 ETH/USD.
The Ripple remains confined in a somewhat narrow range, and it is still trading under the 1 USD threshold. Despite the promises of facilitating cross-border transactions, Ripple is still unable to deliver on its promises. The case for long positions is still weak on this cryptocurrency.
To a large extent, cryptocurrencies have lost their luster this year. The upside momentum remains weak, and traders are advised to watch support levels closely. Short positions may be preferable at this point.
Image – Crypto assets look bearish HD photo by Kanchanara (unsplash.com)