HomeTradingDowntrend for cryptocurrencies: Bitcoin in the $9,000 area

Downtrend for cryptocurrencies: Bitcoin in the $9,000 area

The third day of the downtrend for the cryptocurrency sector, reflecting the trend that is developing in traditional markets. 

The sell-off characterized the stock markets for the second consecutive day. European markets cancelled out the last 4 months and returned to the levels of October. The US indices are holding up better, with the S&P 500 falling back to mid-December levels. 

It is a turbulent period where tensions are also reflected in the volatility remaining at high levels. The VIX index rose to 30 yesterday, reaching a new high, the highest since 2018, a technical condition that highlights the period of high tension in the stock markets. Beyond 30, in fact, stock markets may be considered in panic selling mode. 

Whereas the Bitcoin volatility index (BTC) is slightly up, just above 2.5% daily on a monthly basis, the average level of recent months. 

For the first time since the beginning of the year, the weekly balance of the first 35 cryptocurrencies with higher capitalization is preceded by the negative sign, declines that extend even beyond 10% as in the case of Ethereum (ETH) or Ripple (XRP): both declining between 15 and 20% on a weekly basis. Bitcoin holds better, falling back just over 9%. 

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Source: COIN360.com

The fall of the last few hours continues with prices returning to the support levels of the beginning of the month. Today is a good example of the sentiment of these days, with over 90% of cryptocurrencies in negative territory. Among the few with green signs, the best of the day is Swipe (SXP) along with Bytecoin (BCN) up 5%. 

The downtrend that continues even today makes the market cap lose 15 billion dollars from yesterday’s levels and today comes close to 260 billion dollars. Volumes remain high despite the bearish context with trades over $130 billion, while Bitcoin maintains daily trades over one billion. This is the third day with the highest trading volumes since mid-January.

In a phase in which the negative sign has prevailed in recent days, Bitcoin returns to gain ground by pushing beyond the 64% dominance threshold. Ethereum is falling back to almost 10% dominance. More marked is the loss of market share of Ripple that returns close to 4%, the lowest levels in recent years already tested at the end of January. 

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Bitcoin chart by Tradingview

Bitcoin (BTC) downtrend

Bitcoin continues to fall and lose value, breaking the first support of $9,500 heading to test the $9,000-9,100 area. It is a 13% drop from the February 13th highs when prices touched $10,500. In case of continued bearish continuation, the next technical support is in area 8,800.

Only a break of $8,800-8,600 would trigger a first wake-up call on the medium-term bullish trend, still valid, and which started from the lows of the first days of January.

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Ethereum chart by Tradingview

Ethereum (ETH)

Ethereum is experiencing a more intense decline. Prices return below 250 dollars with extensions that in these hours are testing the $235 area. It is a movement that sees the prices of Ethereum lose about 18% from the highs recorded in mid-February

For Ethereum the uptrend is not compromised, but a continuation of the downward movement below $225 would give a first warning signal. For Ethereum at the moment, it is necessary to evaluate the resistance of the current levels or the next level in the $225 area. 

XRP 20200226
XRP chart by Tradingview

Ripple (XRP)

The current decline does not spare Ripple, which shows a more pronounced setback among the top three and falls below 24 cents. XRP is recording a loss in quotations from the mid-February highs that extends over 30%.

Ripple continues to show signs of fatigue and does not give any upward signs of a reversal, unlike Bitcoin, Ethereum and the altcoins. For XRP it is important to maintain the level of these hours at 24 cents, otherwise, the next support is in the 21 cents area. 


Federico Izzi
Federico Izzi
Financial analyst and independent #trader – S.I.A.T. & Assob.it partner. He operates actively on stock and derivatives markets (futures and options) since 1997. A precursor of cyclic-volumetric analysis he is known for having identified the most important upward and downward movements in the financial markets of recent years. He participates annually as a speaker at the ITForum in Rimini since the 2010 edition and InvestingRoma and Napoli since the first edition of 2015. He is a guest and market expert on the "Trading Room" and "Market Driver" broadcasts of Class CNBC, Borsa Diretta.tv and on the evening news of Traderlink. Since July 2017 he is a permanent guest on LeFonti.TV, the only weekly national space dedicated to cryptocurrencies alongside the most important international experts in the field. He was interviewed as a cryptocurrency expert for Forbes Italia, Panorama, StartupItalia and DonnaModerna. He was recognized as the first Italian technical analyst to have published the first secular cyclic analysis on Bitcoin. Periodically publishes articles on ITForum News, Sole24Ore, MILANOFINANZA, TrendOnLine and Wall Street Italy. Federico Izzi is... "Zio Romolo".