Cryptocurrencies at the verge of Falling by 58% Globally

Risky assets like equities and cryptocurrencies seem to be losing value owing to macroeconomic circumstances.
Cryptocurrencies at the verge of Falling by 58% Globally
Cryptocurrencies at the verge of Falling by 58% Globally

The market’s price movement of Bitcoin and other cryptocurrencies has been negative for the longest time between 2017 and 2018.

The macroeconomic outlook and how growth and inflation will impact the value of cryptocurrencies seem to be the focus of everyone’s attention.

Below the time of writing, the total market value of cryptocurrencies was below $1 trillion and may retest support at $920 billion.

Cryptocurrencies like the Bitcoin Face “Permanent Damage”

If the U.S. dollar continues to rise, the sector’s overall market value might decline by 58% by completing a bear flag displayed on its weekly chart.

According to economist Caleb Franzen, this may push the market to its predicted levels of $400 billion in 2020 and wipe away a significant portion of the gains achieved during the last bull run.

The price of Bitcoin may return to the low $10,000 level as a result.

According to Weller, Bitcoin suffered “permanent damage” as its price dropped from an annual peak of around $48,000 to a yearly low of $18,700.

As the price of cryptocurrencies rose from those lows, BTC established a rising channel, but the 50-day Exponential Moving Average rejected it last week (EMA).

A retest of the summer lows around $18,700 is likely after the price of Bitcoin fell below this channel, as can be seen in the chart below.

Ethereum, an important benchmark for the sector, has, in Weller’s opinion, seen an incredible increase.

The transition of the cryptocurrency to a Proof-of-Stake (PoS) consensus will be completed with The Merge.

The expert believes that as the price of Ethereum is now below its EMA, it may return to its swing low from late July, which was about $1,375.

The chart below shows that if bulls can drive the price back to its levels from last week, ETH may retest that support with a probability of sliding below $1,275 and $1,000.