Pretty much everyone in crypto is hurting this week, with the overall Cryptocurrency market cap decreasing by over $300 billion since Sunday 11/14.
The first domino to fall was Bitcoin (BTC) as the coin sold off 3% on Monday and then another 8% Tuesday, finally finding support at its 50-day moving average.
However, this brief selloff may actually turn out to be a good thing!
We can see that Bitcoin became overbought on November 8th, both on price and momentum according to RealMotion. Also, in the days following 11/8, you can see that Bitcoin slumped back down to the $63,500 support level, attempting to bounce multiple times before finally crashing down to the $58,500 October support level.
We should see relatively strong support between $58,500 and the psychological $60,000 level as Bitcoin reaccumulates, especially with the 50-day moving average acting as additional technical support.
Prices in large-cap coins (especially Defi projects making new highs) were definitely running a bit rich leading up to the start of this week, so it is no surprise to see a market-wide reset.
Other than Bitcoin, several popular large-caps sold off rapidly, including Ethereum (ETH), Solana (SOL), and Polkadot (DOT). Again, no surprise here as all 3 reached new all-time highs within the past month.
Smart money is NOT running for the hills right now, with institutional buying remaining steady as prices dropped the past few days. If anything, this may be the last ‘cheap’ buying opportunity before Bitcoin makes a run to $70,000 and brings the rest of the market to new highs with it.
Just know that when you’re selling, the big guys keep buying.
Coins to Watch: Large-cap DeFi projects, especially those that have native NFT functionality and NFT Marketplaces (Ethereum & Solana). Non-Fungible Tokens (NFTs) are being discussed more than ever and look to be the next big sub-sector of the cryptocurrency/blockchain industry.
Wednesday’s Winners: Avalanche (AVAX) +14%. Avalanche is another large-cap DeFi platform, and seems to be the only coin in its category to continue its outperformance despite the market selloff. With Solana’s price sliding, many crypto enthusiasts have already started to proclaim “Solana Summer, Avalanche Winter”. All jokes aside, this move likely has very little to do with seasonal trends.
Wednesday’s Losers: Solana (SOL) continues to slide from all-time highs, but likely will find support at the $210 level, or at the very worst will find support at its 50-day moving average.
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The author may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not represent the views or opinions of any other person or entity.