Crypto Latest: Ether (ETH) Leads the Losses Despite NFT Popularity, Bitcoin (BTC) Sees Higher Lows
Key Talking Points:
- Crypto selloff continues as buyers struggle to consolidate momentum
- Ether could take the top spot as NFTs become more popular
Cryptocurrencies are struggling to get a grip on Friday after the meltdown staged on Tuesday. Bitcoin is just managing to hold above $46,000 after dropping more than 11% on Tuesday but cryptos may be in for further losses if momentum isn’t reversed soon. The pullback at the beginning of the week is a mix of “buy the rumor, sell the fact” after El Salvador adopted Bitcoin as a legal tender and the threat of a possible US lawsuit against crypto exchange Coinbase.
The mood in the market since then has been pretty risk-off despite an attempted rebound during Wednesday’s session and a dip in volatility may mean the coins will find it harder to bounce back in the short term. The biggest loser so far today is Ether, dropping 1.4% at the time of writing, adding on to yesterday’s 2.5% drop. As the coin linked to blockchain Ethereum it is in my opinion the crypto that could overpass Bitcoin in the next year or so, especially since the rise in popularity of non-fungible tokens (NFTs), unique digital assets that are mostly offered on Ethereum’s blockchain, with digital art being the standout offering so far.
So all in all, Ethereum is handling more volume than Bitcoin’s blockchain and offers a wider variety, being used widely to settle contract execution and online payments, which makes Ether an important candidate for the top spot in the crypto world. AS for the coin’s price, the pullback on Tuesday was stopped in close proximity to the $3,000 mark, where the 50-day SMA is converging, an area of increased importance in the past month. Before then, the area around $3,218 may offer some short-term support as Ether has fluctuated around this area in the past. On the topside, we may see some resistance arise around $3,500 before the $4,000 mark comes into play, although the RSI and Stochastic oscillators are signaling the possibility of further bearish momentum in the medium term.
ETH/USD Daily chart
Meanwhile, the price of Bitcoin is attempting to stabilize around the $45,960 mark, an area of importance that I’ve had marked on my chart for the last few months. The pattern on the daily chart has seen higher lows since the Tuesday meltdown so BTC/USD is finding support along the way, and so far today the daily low is above yesterday’s, which would be a positive sign if no further losses are amassed in today’s session. If so, watch out for a bounce above $46,500 for further bullish consolidation, although the stochastic is showing signs of struggle in the short term. For support, the 50-day SMA is just converging at the $45,000 level which would be a good place to start.
BTC/USD Daily Chart
--- Written by Daniela Sabin Hathorn, Market Analyst
Follow Daniela on Twitter @HathornSabin
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.