The cryptocurrency market under turbulence, which direction will it take?

In this new crypto point of the weekend, we will analyze the current situation of cryptocurrencies which are facing a new period of turbulence. The failure of Silicon Valley Bank led to a depeg USDC which is currently trading at $0.95. Thus, with the cryptocurrency market under stress, the majority of assets have taken a bearish direction since the weekend. Without further ado, let’s head over to TradingView to determine where prices are headed in the coming weeks.

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The market bounces off a relevant technical level

Price of the total market capitalization of cryptocurrencies on a daily scale (Bitcoin, Ethereum and altcoins).
Price of the total market capitalization of cryptocurrencies on a daily scale (Bitcoin, Ethereum and altcoins).

Losing its technical level in confluence with the EMA200 at 970/980 billion dollars, the price quickly moved towards its daily MA100 by registering a wick on a technical level that we had identified at 875 billion dollars. This rebound, although not very powerful, has the merit of existing.

Currently, the market is struggling to stay above 920 billion, a technical level on which the price has reacted on numerous occasions. If it manages to hold above, the price will likely head towards $980 billion to attempt a bullish re-entry of this former support zone.

However, if the market does not succeed following a bearish recovery of bitcoin and ether and it is led to evolve below the technical zone at $920 billion as well as the MA100, the price will continue its fall and will likely head towards $835 billion.

Will altcoins manage to stand out?

Daily-scale cryptocurrency market capitalization price (excluding Bitcoin and Ethereum)

For altcoins, the situation is not totally different since prices are currently at a technical confluence with the MA100 and, just below, a technical support at 330/335 billion dollars. Like the total market capitalization, the objective is to maintain the level of the MA100 and, in this case, reintegrate the 350 billion dollars (technical zone which is located just above).

In this scenario where a nice bullish rebound would take place, altcoins could do well against the king of cryptocurrencies by returning towards the EMA200 which is in confluence with a technical level at $375 billion.

Given the current situation of the total capitalization and that of the altcoins, if we do not see a new downward low, we can envisage a nice upward movement which will allow the whole market to regain color. Of course, the levels on which the courses are maintained should not be lost.

Bitcoin dominance continues to fall gradually

Course of the dominance of Bitcoin against other cryptocurrencies on the 1D unit of time
Course of Bitcoin dominance against other cryptocurrencies over the unit of time 1D

For bitcoin dominance, the price has indeed confirmed the downward trend reversal after a double top in confluence with the EMA200 3D. By having just entered a lower trough than the previous one, bitcoin demonstrates that it is entering a period where its strength is less. Thus, if the price fails to maintain itself at the current level, the next support is the MA100 which is located just above a technical level at 42.15%.

These are the two levels to watch to hope for a bullish comeback from bitcoin dominance following a hypothetical drop in the price over the next few weeks. In this context, we can hope that Ethereum and altcoins can do well and take a bullish direction by outperforming Bitcoin fairly quickly.

Until further notice, as long as the price of bitcoin does not manage to pass the resistance in confluence with the EMA200, we can preserve a bearish bias and an inability of the asset to register in an outperformance situation.

Ethereum pushes higher against the king of cryptocurrencies

Ethereum price against Bitcoin on the 1D time unit
Ethereum price against Bitcoin on the 1D time unit

For Ether, things are picking up a little since the asset, against Bitcoin, is breaking at the upper limit of its range as well as a technical confluence which includes the EMA200 as well as the MA100. Ethereum is therefore heading towards the first resistance at 0.072BTC that we had the opportunity to establish last week.

By managing to stay on the MA100 and the EMA200 while breaking this first resistance at 0.072BTC, the situation will be favorable to the consecration of the bullish scenario that we had mentioned with a return of Ether to the resistance at 0.076BTC.

This would clearly be relevant alongside a decline in Bitcoin dominance since February. In this context, with a rise in Ethereum, the altcoins would be able to do well by bouncing off the current level if we refer to the capitalization that we analyzed previously.

Decentralized finance cryptocurrencies have fallen sharply

Decentralized finance cryptocurrency capitalization price on a daily scale (1D)
Decentralized finance cryptocurrency capitalization price on a daily scale (1D)

For the decentralized finance sector, the situation is also similar. The capitalization, after registering the highest peak since August, turned lower after losing the technical zone at $48.3/$49 billion. The loss of the EMA200, dynamic support and resistance, caused the price to accelerate its fall with a return of the price on its MA100.

From now on, the challenge is simple: stay on the MA100 and resume the pivot zone (shown in blue) which is located at 43.6/44 billion dollars. If the price manages to overcome it and stay above it, the situation will be more than interesting and will lead us to consider a continuation of the price rise with a return to the EMA200 which is below the technical zone at $48.3/49 billion.

The other observation that we can make is the significant wick that took place on the course, which testifies to the buying force and the will, for the latter, to find a bullish momentum. However, nothing is decided yet. A move below the MA100 would be a bad sign and would cause the capitalization to revisit the low point of its wick.

Here we are at the end of this weekend crypto point. It is clear that a significant decline has taken place and has been accelerated by the bankruptcy of SVB and the depeg of the USDC. However, since the systemic risk is not yet removed, cryptocurrencies are not out of the woods and will have to show strength to return to old highs. Currently, the challenge for prices is to maintain current levels to avoid revisiting old lows that we have mentioned.

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Last Verdict

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