The crypto market has been all red. This has been the trend for the last couple of days. Although the drop has been moderate, most digital assets are trading just above key supports and are at risk of an extended plunge. One prominent analyst believes that the worst isn’t over and a couple of coins will see a further drop before finding meaningful support.
The Higher The Rally, The Deeper The Drop
Popular analysts ‘The Wolf Of All Streets who goes by Twitter handle, @scottmelkel, has been warning that a number of coins could be headed deep under. He notes that the coins that had the highest gains are the same that were overbought. They will be crashing hard as they struggle to find support.
Remember – the assets that are overbought and have had the largest recent gains are the ones that have the furthest to fall before finding meaningful support.
— The Wolf Of All Streets (@scottmelker) February 25, 2020
He does not specify which coins these are. But a number of altcoins have recently recorded astronomical gains. Most popular include BINANCE (BNB), Ethereum (ETH), and Tezos (XTZ) which have recorded gains of over 100% since January.
Ethereum Overbought
Specifically for Ethereum, we recently reported that an overbought signal flashed. This meant that the asset could face a major bearish phase if unable to break the next key resistances. At the time, the Ethereum was looking to break above $290, since failing, it has retraced to the $240 position.
Stops approaching. Today is not the day to be trading alts. https://t.co/axSJB7Vqxg
— The Wolf Of All Streets (@scottmelker) February 25, 2020
Of course, volatility is at a high. This means that movement is drastic and while the market is bearish this hour, this could change in the next. The volatility is especially supported by economic anxiety around the world.
As altcoins continue to bleed and analysts warn against them, Bitcoin is not having it better. Although t has shown relative stability compared to most cryptocurrencies, the crypto king has just breached key support.
In the last few hours, Bitcoin has slipped below the $9,500 support, this could see a retest of $9,000 if $9,300 does not hold. This should be supported by the growing dominance which is now headed for 64%.
Many analysts still expect Bitcoin to bounce out of this stronger and rally and break the $10K psychological position. But for now, the sentiment is low and the market is in real need of a positive trigger to get it rallying again.
