There is a call to fear and panic while the cryptography market faces another big daily drop. A large number of high-level cryptocurrencies recorded large tugs, a retreat was expected and justified.
The cryptocurrency moves lower is part of the course
Bitcoin, Ethereum and the largest cryptocurrency market suffered a significant crash during Thursday's trading. Prices have been traded in a very congested range since the jump on Sunday. The move today, though certainly painful for every cryptic investor / speculator, is certainly the rule for the course – and the behavior and nature of the move are extremely common. Just as we saw a huge price jump on Sunday, that same move took place today, except downwards. What was the distinctive feature? A single entity that pushes the price in an extremely short period of time. If we look at the chart above, we see the lower initial push from 4001.73 to 3813.98 in a 5 minute interval. The prices then consolidated – the volume was almost non-existent. Price sat, literally, right at the top of the top trend line before the next drop. The next main dive lasted for a total of 10 minutes and fell from 3777.14 to 3560. The price stopped exactly with the Fibonacci retracement level of 61.8% from the latest minimum of 4239.39 at the minimum more recent than 3185.17. Note that I drew the retracement up to the extreme low oscillation – this is the wrong way to trace an accurate retracement of Fibonacci. And as for the Bitcoin move – considering the proximity that the price was trading on the daily chart of Ichimoku, this downward movement was also a very likely event – the Bitcoin is trading near the bottom of the cloud, which is a strong resistance area.
It is a profit, not a panic
While the moves today look nasty – well, they are – it's not even a surprise and should not be a surprise. A significant number of cryptocurrencies with high market capitalization has increased significantly over the last 30 days. Cardano, who lost over -18% at some point during the day, is a perfect example of this. Cardano has been on a bullish trend since December 15thth, 2018 – almost 30 days of rectification. During that increase, Cardano gained 101.72%. So a 30% withdrawal is also justified. Litecoin also recorded a significant increase both in terms of time and price. For over 25 days, Litecoin has recovered from the 22.17 to the maximum of the swing of 41.27 – a gain of 86.15 on days -13.56% less. In any other important market, these moves would be scary, but for cryptocurrencies these moves are normal. Unsurprisingly, some people want to take some of their positions off the table during this last bull run. And the move today does not mean that we will continue to sell off to create lower lows (or lows below the minimum of December 2018). It will be very interesting to see if the traders buy this dive – or less the decline. If this happens, then we can assume that we are in a new market for buyers and in a market where we can buy dives instead of reducing rallies.