Technical analysis

Cryptocurrency market at risk of a second drop

Julien Moretto – 23 Sep 2020

The bounce was short-lived in the cryptocurrency market. Bitcoin and the vast majority of assets are down again this week, following a black Monday that saw some coins lose nearly 20% in 24 hours. Overall, Bitcoin is doing better than its peers with a moderate decline of about 2% over the last seven days, hovering around €9,000 ($10,500) on September 23. Ethereum suffered more from the decline, losing a little more than 8%.

The highlight of the beginning of the week is undoubtedly the return of the famous “risk on/ risk off”. Indeed, the downtrend that began on Monday affected all assets without exception: stock markets, commodities, even “safe haven” values such as gold and Bitcoin. The challenge is to observe how the week will end on all markets. If the bearish trend is clearly maintained, the odds will be high that Bitcoin will return to its symbolic $10,000 support, which could very well break this time, unlike at the beginning of the month. Detailed analysis.

  • According to CoinGecko, the market capitalization continues to oscillate, returning to $335 billion, up from $352 billion last week.
  • Bitcoin’s dominance is almost stable at 57.7%, up from 57.2% last week.
  • The best performance of the top 50 is to be attributed to DigiByte (DGB) with +33% over one week.

We invite you to discover our analysis in video (in french and dated September 22nd) :

Bitcoin (BTC)

Coinhouse recommendation : 
Wait

  • Our sell signal of last week in the €9300 to €9430 ($11,000 to $11,200) zone has been effective. The downtrend even surprised by its brutality during Monday, September 21. It is now necessary to be patient. Bitcoin has stopped on an intermediate support at €8800 ($10,300) which alone does not justify to buy just yet.
  • The short-term trend remains bearish. If this trend strengthens, this support will break and the price will return to test the €8600 ($10,000) support, and then possibly the €8300 ($9700) price zone, which may be of interest to institutional investors trading Bitcoin on the Chicago Mercantile Exchange, due to an as yet unfilled “gap” in the CME futures contracts. In the scenario of a strong downtrend, even the €8000 ($9000) support could be re-tested. In this eventuality, long-term purchases will be made on this price level. In the meantime, we will see how the price reacts again on the $10,000 support.
  • Less likely, the scenario of an immediate uptrend recovery should not be ruled out. We will wait for the price to rise above €9,200 ($10,700) before buying again.

Ethereum (ETH)

Coinhouse recommendation : 
Wait

  • Ethereum (ETH) loses about 8% on the week to stand at €295 ($344) on September 23. The bearish trend remains strong. Here too, we must remain patient after last week’s sell signal. If the €287 ($335) level breaks, the price of Ether could retest the lowest level of September 5 at 265€ (310$). Even this previous support could not hold, and it will be possible to buy from on signal and according to the price action. If this support breaks, then the chances are high to go to the pivotal level of €245($290), which will be strategic to make long-term purchases.
  • If the price rises above the €300 ($360) level, then the chances of a quick recovery of the uptrend will be higher. We will buy if the chart closes above this current resistance in the daily timeframe.

Polkadot (DOT)

Coinhouse recommendation : 
Buy

  • Polkadot (DOT) is a cryptocurrency recently added to Coinhouse platform. Although it’s losing 20% this week, at €3.60 ($4.20), it’s currently coming back to a potentially interesting area to buy. This zone is the €3.03 to €3.30 ($3.60 to $3.90) support which has already caused the price to bounce back in early September. We are looking to buy near this zone. The first partial profits will be between €4.11 and 4.20€ ($4.77 and 4.97$). Of course, we will have to resell if the current support breaks down. The odds will then be high that the price will return to the €2.50 ($3) level.

Tops & flops of the week (top 50 marketcap)


Tops

1- Digibyte (DGB) : +34%
2- Leo Token (LEO) : +9%
3- Theta Network (THETA) : +6%


Flops

1- UMA: -37%
2- Yearn.finance (YFI) : -32%
3- Ontology (ONT) : -22,3%

In this article, all information is given for information purposes only, even if it has been established from serious and reputable sources. It does not constitute an offer by Coinhouse to buy or sell digital assets, or an offer to provide services on digital assets, nor does it constitute advice, encouragement or a recommendation to operate on the digital assets in question. It constitutes simple information over which the user retains absolute control. We inform you that if you choose to invest in digital assets, you must be aware of our general terms and conditions of sale (https://bit.ly/2FGW2ek) and accept the various risks listed and defined on our legal warning page (https://bit.ly/3c4sQKc).

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