The market bloodbath that began on Tuesday has today, Wednesday, stalled. Most of the top cryptocurrencies are showing relative stability after shedding between 4% and 15% in the last 48 hours. As we reported, this has seen the total market cap lose more than $10 billion. The primary reason for the plunge has been unclear thus far with several reasons viewed as potential catalysts as we reported earlier.
Most traders were expecting a move up and the recent plunge has come as a surprise. Now with critical support in play can we expect a move up towards recovery or a further plunge that sees coins bottom similarly to 2018?
Bitcoin Needs To Hold Above $6.5K Or Risk Plunging Below $6K
For Bitcoin, the recent plunge has seen prices fall to around $6,600, a support which the bulls are fighting tooth and nail to protect. The bulls are currently wary of the $6,500 support which if broken could lead to a further plunge below $6,000. Popular Twitter analyst Jacob Canfield believes that Bitcoin is headed for $5,500.
“I think we could see $5,500 personally, as it is the 78.6% from the swing low to swing high, but we may see a bounce or two in between here and there”
As prices continue to pull away from the $7K position, the bulls are further likely to lose the desire to fight back and put prices up. This could mean more control for the bears in the mid-term.
Altcoins Fate In The Hands Of Bitcoin
Yesterday, Altcoins nosedived following in Bitcoin’s step. For most, they lost around 5% to 10% and most are trading below critical support. Ethereum, for example, is trading around $122 with a drop to $120 putting this second-largest cryptocurrency at risk of falling below $100.
XRP, on the other hand, is trading for around $0.18 from around $0.23 earlier on Tuesday. For XRP, there is a risk that the altcoin could drop to the $0.10 region if the plunge continues in the next few days.
Fortunately, these and most other top altcoins have shown stability on Wednesday and are looking to stage a recovery. The next few hours could determine how the year ends and more importantly who will be in control, the bulls or the bears.