The market has been trading sideways for much of the week. For Bitcoin, this has seen the asset trade around the $10k region. This has been a comfortable position for investors, as it holds above critical support and keeps bullish sentiments high. Altcoins have also been trading above critical support.
Although many took a big hit at the start of the week, recent bottoms have offered strong support. All this however changed in the late hours of Wednesday. Nearly all top cryptocurrencies experienced a plunge led by the three top cryptocurrencies, Bitcoin, Ethereum and Ripple’s XRP. In a matter of minutes, all three lost the value of between 5% to 10%, wiping out billions of dollars in the market.
The recent plunge has seen all three coins fall below recent found support. The worst-hit of the three, Ethereum, has dropped to around $169 at the time of press, breaking below its recent support of $185 and $178.
There is strong support above $165 and it is unlikely there will be further drops below this. XRP which is experiencing a more moderate drop of 5% at the time of press, has retested its support of $0.25.
Bitcoin, on the other hand, has wiped out hundreds from its day time high. On Wednesday, the asset was trading as high as $10,200. At the time of press, this has fallen to $9,469. Although once again the asset has shown there is strong support above the $9,500 position, the plunge has come as a surprise for many investors.
What Triggered The Plunge And What Next?
Although it has been unclear what has triggered the plunge, reports on China launching their state-owned cryptocurrency could have shaken a few investors.
Earlier we reported that investor sentiment is still bullish. The recent dip could be a great buying opportunity for bulls. Many will accumulate more before the asset rallies again. In the past, Bitcoin has not spent a lot of time below $10K. In this latest case, this could be achieved before the end of the week and with higher resistance and support positions in mind.