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Market collapse. Bitcoin and Ethereum are faltering
Wednesday 12 June 2024 ▪ 4 minute read ▪ by Evans S.
Cryptocurrencies are going through a tumultuous period, characterized by significant price drops. Bitcoin and Ethereum, the two main cryptocurrencies, are particularly affected. This decline raises questions about the future of the market and the forces at play. Let’s analyze this situation in detail.
Selling Pressure: A Threat to Bitcoin
Bitcoin, often perceived as a safe haven in the cryptocurrency sphere, is not immune to market fluctuations. The crucial support level to watch on the daily chart is $66,205. This threshold coincides with an important resistance line.
A close below this level could intensify selling pressure, leading to a further price decline.
In reverse, the most important resistance level for Bitcoin it is $69,667. Recently, this level has generated strong resistance pressure, preventing the price from rising.
A daily close above this threshold could rekindle hopes of a bullish trend. However, investors must remain cautious, as market movements are often unpredictable.
If the flagship cryptocurrency closes below $66,205, selling pressure could accelerate. This situation could push the price to new lows, further eroding investor confidence.
Increased market volatility increases risks, making predictions difficult. Operators should therefore carefully monitor these critical levels.
Ethereum: between consolidation and selling pressure
Ethereum, the second largest cryptocurrency, is also under severe pressure. A consolidation emerged on the daily chart after breaking out of a triangle pattern.
This consolidation is often a sign of stability, but the current selling pressure has broken the key support level.
For the ETH cryptocurrency, the most important support level is $3,502. A daily close below this level could trigger an increase in selling pressure, reversing recent optimistic ETF-related gains. This situation would be worrisome for investors who were hoping for a sustainable rebound.
The key resistance level for this cryptocurrency is the average 9 EMA of $3,689. A daily close above this level could give a boost to the price, paving the way for a recovery. However, the market remains fragile and investors must remain vigilant against unpredictable fluctuations.
Over the next few days, Ethereum’s behavior around support and resistance levels will determine its trajectory.
Investors must be ready to react quickly to market movements to minimize losses and maximize potential gains. Patience and caution are essential during this uncertain time.
Macroeconomic factors: a determining influence
The price fluctuations of Bitcoin and the cryptocurrency ETH cannot be fully understood without examining macroeconomic factors. The global economic situation plays a crucial role in cryptocurrency movements.
Economic reports, such as US employment data, have a significant impact on the cryptocurrency market.
For example, a recent report revealed stronger-than-expected job growth in May, contributing to Bitcoin’s decline. This data influences investors’ trading decisions and strategies.
Decisions by central banks, particularly the US Federal Reserve and the European Central Bank, also impact cryptocurrencies. For example, lower interest rates can make risky assets like Bitcoin more attractive. However, uncertainties about future central bank decisions add a level of complexity to market analysis.
General investor sentiment also plays a role. Fear, uncertainty and doubt (FUD) can lead to massive selling, while excessive optimism can lead to impulsive buying.
Investors must remain informed and vigilant, taking a proactive approach to risk management. Caution is essential in this uncertain landscape. The future of cryptocurrencies remains promising, but the road is fraught with challenges. Indeed, liquidation risk persists around 71k.
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Evans S.
Fascinated by bitcoin since 2017, Evariste has not stopped researching on the topic. If his main interest is in trading, the sage is desperate to discover all the advanced centers on cryptocurrencies. As an editor, he aspires to consistently provide high-quality work that reflects the state of the industry as a whole.
DISCLAIMER
The views, thoughts and opinions expressed in this article are solely those of the author and should not be relied upon as investment advice. Do your research before making any investment decisions.