This week was bloody for crypto related assets. Most coins had experienced a 20%+ drop in the past week. What also meaningful on the chart is that, BTC officially plunged through the low of 29200 that was made on 20-Jul-2021. This breakage should be marked as the confirmation of the bearish trend of BTC. With the increasing attention from the FED and white house on crypto matters, as well as Chinese continuous effort on stopping CNY outflow, this bearish trend is expected to be long term and potentially irreversible.
Last week a Soros style attack was seen at Terra Luna, which is a stable coin project that achieve peg with USD via an arbitrage system. LUNA had collapsed to practically no value after the attack. The collapse has also brought down investor sentiment on the whole asset class, which caused the asset-wide plummet we saw last week.
While this is not the first time seeing massive correction in crypto assets, however one should note that last week BTC has actually dropped through a major support level of 29200, which is the lower boundary of the 2-years consolidation zone. It is common to see rebound at the current level (think about those who have missed the whole post-covid rally might be thinking to build position at this discounted price), however the bearish trend is likely to continue after rebound to level between 20-days to 50-days moving average (i.e. 37000-40000) - of course if selling pressure resume next week then we might see a weaker rebound instead.
Technically speaking, failing the consolidation zone typically will head toward where the previous trend started (i.e. the first breakout after post-covid QE), here are some important price reference:
Note: All the pricing level are rounded and are marked base on CME BTC futures, I am aware that there might be slight discrepancy with other exchanges such as Binance.
Last week a Soros style attack was seen at Terra Luna, which is a stable coin project that achieve peg with USD via an arbitrage system. LUNA had collapsed to practically no value after the attack. The collapse has also brought down investor sentiment on the whole asset class, which caused the asset-wide plummet we saw last week.
While this is not the first time seeing massive correction in crypto assets, however one should note that last week BTC has actually dropped through a major support level of 29200, which is the lower boundary of the 2-years consolidation zone. It is common to see rebound at the current level (think about those who have missed the whole post-covid rally might be thinking to build position at this discounted price), however the bearish trend is likely to continue after rebound to level between 20-days to 50-days moving average (i.e. 37000-40000) - of course if selling pressure resume next week then we might see a weaker rebound instead.
Technically speaking, failing the consolidation zone typically will head toward where the previous trend started (i.e. the first breakout after post-covid QE), here are some important price reference:
- Post-covid rally started on 05-Nov-2020: 14200
- Covid bottom on 13-Mar-2020: 4210
Note: All the pricing level are rounded and are marked base on CME BTC futures, I am aware that there might be slight discrepancy with other exchanges such as Binance.