Yahoo Finance A Sea of Red Engulfs the Cryptocurrencies once more
Volatility persisted throughout the weekend, with Bitcoin seeing highs and lows through to Sunday morning, almost reminiscent of the moves through the week that culminated in a more then 50% rally from Tuesday’s $5,920.72 low to Friday’s close.
On Saturday, Bitcoin managed to rally 4.56% to an intraday high $9,090.8, with the prospects of recovering to $10,000 beginning to build, before Bitcoin came against strong resistance and has faced strong selling pressure since.
With the Cboe Bitcoin futures February contract sitting at $8,610 by Friday’s close, a pullback from $9,000 levels was to be expected ahead of Monday’s open, though not to the extent seen through the 2nd half of Saturday and early Sunday.
Bitcoin dominance rose from 33.6% to 34.8% on Saturday and investor jitters over regulatory oversight continues to plague the cryptomarket, with the SEC being clearer on its intentions to heavy regulate the ICO market, whilst classifying the cryptocurrencies differently, depending upon their function.
With the IMF having called for a more coordinated approach to managing the cryptomarket, best in class policies will likely be adopted and that’s unlikely to be too bullish for the market near-term.
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While total cryptomarket cap had moved up to $458bn midway through the day on Saturday, which saw Bitcoin’s market cap move up to $153.55bn, it’s been downhill since, with Bitcoin’s market cap falling back to $134.68bn at the time of writing, with Bitcoin down 8.18% to $7,860.
It’s been a dire 24-hours for Bitcoin and the cryptocurrencies and the weekend slide certainly doesn’t bode well for the week ahead, with Bitcoin sliding through its first major support level of $8,123.64, with the 2nd support level of $7,687.28 in sight.
A sustained rally through the weekend would have been an important milestone for the cryptocurrencies, with previous weekends ending with similar movements, which continues to reflect investor unease over the uncertainties that lies ahead for the cryptocurrencies and the initial coin offering platform.
Functionality continues to be an afterthought for the market and speculative investors are jumping in and out in herd like mentality that justifies the sizeable swings that are being seen across the cryptocurrencies in recent weeks.
Knee jerk reactions create opportunities, but they also create great unease and Bitcoin’s weekend highs have been on a downward trend this year, which will also be of concern.
For the day ahead, we will expect some recovery through the 2nd half of the day, though we certainly wouldn’t expect Bitcoin to move back through to $9,000 levels, with Friday’s futures close pinning back any material upside. Bitcoin’s first resistance level sits at $8,947.69 today and all things considered, we’re unlikely to see Bitcoin move too close to resistance levels.
Elsewhere, Ripple has slumped 11.36% to $0.907, with Ethereum down 7.38% to $786.82, Ethereum having failed to recover to $1,000 levels in last week’s relief rally.
The worst of the majors was Stellar Lumens however, which slumped 12.8% to $0.5021 through the early part of the morning, pulling back from Saturday’s 0.644 high.
We could see volumes pickup at current levels, which will be considered attractive by many, but rallies are short lived and few are interested in being exposed at the start of the week.
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This article was originally posted on FX Empire
