Bitcoin and Ethereum find buyers after another -15% plunge in September
Tony Sycamore September 21, 2021 4:27 AM
A reminder overnight that cryptocurrencies are part of the risk asset complex as an Evergrande inspired sell-off in global equities transpired into heavy falls for cryptocurrencies.
The two leading cryptocurrencies, Bitcoin and Ethereum, closed the overnight session at $43,035 (-8.91%) and $2977 (-10.55%), respectively, before collapsing a further ~6% shortly after the re-opening this morning.
Likely this morning's fall after the re-open was stop-loss activity on leveraged positions and marks the second time this month that both cryptocurrencies have plunged over -15% in 24 hours. The first occasion was after Bitcoin's shaky debut as official legal tender in El Salvador in early September.
Returning to the overnight sell-off, the most recent leg lower is viewed as the third leg of a three-wave correction from Bitcoins $52,956 high and Ethereum's $4025 high. Notably, after this morning's falls, both coins have reached their logical pullback targets within an Elliott Wave framework.
In an interview on AusbizTV yesterday when Bitcoin was trading at $45.500, it was noted that Bitcoin could drop as low as US$40,000, "give or take one thousand," and that future weakness was likely part of a "corrective pullback within an uptrend,"
At the time of writing, there is evidence of basing/stabilising starting to emerge in the form of a potential bullish daily candle in both Bitcoin and Ethereum. If confirmed at tomorrow's close, it would be an initial signal that a tradable low is likely in place.
Furthermore, should Bitcoin break and close above resistance at $44,500 and Ethereum above $3150, it would indicate the uptrend has resumed and that long positions should be considered, looking for a retest and break of the early September highs.
Source Tradingview. The figures stated areas of September 21st, 2021. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation
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