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Bitcoin (BTC) Slumps Through Support, Alt-Coins Crumble, Heavy Losses Seen

Bitcoin (BTC) Slumps Through Support, Alt-Coins Crumble, Heavy Losses Seen

Nick Cawley, Senior Strategist

Bitcoin (BTC/USD) Price, Chart, and Analysis

  • Bitcoin looks to be making a familiar chart pattern.
  • Alt-coins turning negative on the week.
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A rough start to the week with the cryptocurrency market a sea of red with losses on either side of -10% a common sight. After a few days of sideways trading action, today’s sell-off has been prompted by a sharp risk-off turn across many financial markets, sparked by debt solvency concerns in the Chinese property market. The alt-coin space is under the most pressure after weeks of outperforming both Bitcoin (BTC) and Ethereum (ETH).

The positive outlook for Bitcoin is starting to break down with recent trend support now acting as a firm resistance. Bitcoin is also ignoring a recently formed ‘golden cross’ with the 50-sdma back above the 200-sdma for the first time in months. Bitcoin is now below all three simple moving averages, although the recent sell-off has pushed BTC/USD back towards oversold territory, giving the pair a modicum of short-term support. The latest price action is reminiscent of the ‘h’ formation seen between May 10 and July 20, when the set of lower highs kept pushing the price lower before a sharp upturn. If this pattern does repeat itself off the September 7 high, then it may be that BTC/USD will fade marginally lower over the next few days/weeks before moving higher. Support between $42,640 and $43,581 may well hold the key. Any break higher will find resistance off the 50% Fibonacci at $47,067 ahead of $48,840.

Bitcoin (BTC/USD) Daily Price Chart September 20, 2021

The alt-coin market is under pressure today with swathes of coins showing double-digit percentage losses and entering negative territory on a week-on-week basis. A large section of the alt-coin space has outperformed both Bitcoin and Ethereum over the last few months, highlighted by the chart below showing total market capitalization less Bitcoin’s market cap. Again recent trend support is now acting as strong resistance and is unlikely to come under pressure anytime soon. It may well be that the recent alt-coin rally is going to need a period of consolidation if it is to push higher again.

Cryptocurrency Market Minus Bitcoin September 20, 2021

Chart via Trading View

What is your view on Bitcoin and alt-coins – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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