Alejandro Zala, Country Manager of Bitpanda Spain, shared as usual with Cointelegraph en Español, his weekly analysis of the cryptocurrency market. On this occasion, Zala stated that things have gotten worse in the last seven days, since the main cryptocurrencies collapsed just before the last weekend, in which Total market capitalization shrank by around €100 billion in seven days with most major coins falling by double-digit percentages.
On the Bitcoin side, the Bitpanda manager said that the leading cryptocurrency lost its strong bullish momentum and underwent a major correction on Friday. “The price fell below the trend line support and now listed below 22,000 eurosits lowest price in the last four weeks at the time of writing this note”commented.
In this regard, Zala also pointed out that Bitcoin’s dominance – the metric that tracks BTC’s share relative to that of the entire market – is slowly declining, but remains above the 40% level for the time being. “In the last week, its dominance fell by less than 1%, meaning that altcoins failed to capitalize during the Bitcoin price decline”Zala said.
“The pattern break was validated by higher-than-normal volatility as well as percentage drop: BTC dropped nearly 10% in a single day, wiping out over-leveraged traders in a matter of minutes”Zala added, before noting that there is a possibility of a rebound to the upside in the form of a repeat of the breakout.
“If this fails and the price of Bitcoin continues to drop, it could fall towards the support zone of 19,150 euros. On the positive side, resistance is found at €22,000, followed by the €24,000 zone.” he explained.
Ethereum fell more than BTC
About Ethereum, Zala narrated that the second largest cryptocurrency saw an even steeper sell-off than Bitcoin, likely due to some exaggeration of bullish sentiment prior to the Ethereum meltdown. “The price dropped around 12% in a single day and currently at the time of this analysis, it is trading around 1,700 euros, 300 euros less than the maximum reached on August 14,” he commented.
He further noted that the daily RSI is slowly recovering and is targeting the 50 level, which is considered neutral territory. “ETH, which significantly outperformed BTC in the last couple of months, saw its market share above 21% seven days ago. However, it has underperformed against major cryptocurrencies over the last seven days, leading its market share to drop by almost a percentage point,” he added.
Also, regarding the BTC pair, this Zala commented that it fell to the 0.0732 support area and then rose above 0.0784. The moving average is still pointing up, which suggests that ETH is still stronger than BTC on longer timeframe charts.
The feeling got slightly worse
According to market sentiment, Zala explained that due to the recent break this got slightly worse. “The Fear and Greed Index has been inching from the extreme fear zone towards the neutral/optimistic zone in recent weeks, as the index peaked at 47 in mid-August”commented.
Now at 25 points on the scale, Zala also indicated that investor sentiment can again be classified as extreme fear. “Typically, the more extreme the fear environment, or the stronger the sentiment of retail investors, the better the opportunity for contrarians to profit from it.”he added.
Smaller coins outperformed the rest
On the other hand, for altcoins, Zala mentioned a few small-cap coins that have done very well in recent days and have outperformed the rest of the market.
“CHZ since August 21 and broke above the level of 0.22 euros, its highest since mid-April. The fan token has risen since June 18, followed by a downside gap breakout. CHZ is up nearly 200% since bottoming out in mid-June.”Zala said.
EOS also broke a descending trend line and reached a high of almost 2 euros according to Zala.”The price has risen 35% since August 20. However, EOS has been declining since September last year and has lost almost 90% from its highest pointhe stated.
Major smart contract coins remain in their ranges
In this last section, Zala mentioned SOL, a cryptocurrency that according to him is this facing strong resistance near the 36 euro levelthus resulting in a close above that level could push the price towards the €40 mark. “Conversely, the next support is at the level of 32.40 euros. RSI is below 50, indicating bearish momentum.”he pointed.
Lastly, I mention ADA, a cryptocurrency that, in his opinion, failed to become strong above the level of 0.50 euros and is now trading above the support zone of 0.45 euros. “The price has been moving in a range since June. Once this range is broken, it can lead to larger moves, but as the range is still intact, the move cannot be clearly predicted.”he concluded.
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