After fluctuating around the period highs all day yesterday, all of a sudden, in the late evening, a drop led Bitcoin to capitulate with a flash crash that dragged the rest of the sector with it.
Bitcoin prices lost $800 in less than an hour. It was a downhill avalanche that led prices, from highs just over $10,100, to break the $9,900 threshold, short-term support.
From this threshold, prices fell to $9,200 in less than 5 minutes. This has triggered profit taking and stop losses, causing volumes of futures to explode on various exchanges that offer the possibility of leveraging bitcoin futures.
This explosion of volumes on exchanges like BitMEX, among the first to offer services on futures, has seen the upward positions close in a few minutes for a counter value of $100 million.
Yesterday saw the futures on the CME‘s institutional platform registering $1.1 billion trading volumes. This is the third time since the launch of the futures in December 2017 that volumes exceed one billion dollars. This highlights how the last week is a period of strong trades on all markets, both spot and futures, thus confirming a very eventful period throughout the sector.
Yesterday’s downturn in Bitcoin has brought down all the major altcoins. Scrolling through the list of the top 30, there are many red signs, except for Tezos (XTZ) which floats just above parity.
Tezos is different from the others, a behaviour that has been going on since the beginning of the year. Yesterday, Tezos reached almost $4, one of the best rises since the beginning of the year, tripling its value with a +200% jump.
Even Chainlink (LINK), before the overnight crash, had scored new absolute highs close to $4.90. Chainlink consolidates its 11th position behind Tezos even though the difference in capitalization at the moment is over a billion dollars. Chainlink from the lows of January 2nd gained 190% before yesterday’s retracement, while today it loses 10%.
Tezos and Chainlink are the two cryptocurrencies that are most impressive due to the intensity of the uptrend they’ve been achieving since the beginning of the year.
Among the major drops in progress since last night, there are movements of up to -10%, as in the case of Ethereum (ETH), Litecoin (LTC), Eos (EOS), Monero (XMR), Tron (TRX), Bitcoin Cash (BCH), i.e. those that in the last few hours have seen particularly heavy falls. Bitcoin and Ripple (XRP), on the contrary, slow down the decline around -5%.
The declines cause the market cap to drop just below the threshold of 280 billion dollars, while volumes remain at the highest levels of recent days. The dominance sees Bitcoin continue to remain below the threshold of 63%. Ethereum’s dominance remains unchanged under 10% despite the strong shock of the prices. Ripple remains just under 4.5%.
Bitcoin (BTC): flash crash
Bitcoin, after experiencing a brief flash crash last night, with prices plummeting in a few minutes, reaching the $9,300 threshold, saw a reaction that brought the values back into the $9,600 area, a short-term support level. If this threshold broke, a first sign of weakness would come after more than a month and a half of climbs without any particular concern.
But as long as prices remain above $8,800, this is a movement that should be technically contextualized in a bullish market correction. In the next few hours, it will be necessary for Bitcoin to understand where the vitality of this decline will end rather than to observe the resistance levels monitored until yesterday.
After having tested the highs again in the previous 48 hours, Ethereum comes back down, although unlike Bitcoin it is a descent that does not go below the weekend lows. The holding of $255 at the moment shows a good reaction on the part of the short-term support defences.
For Ethereum, the first bearish signal would come with a break of the 235 dollar area. At the moment ETH is just above the $255 threshold, so this decline should be contextualized as a movement due to the strong profit-taking.