09Bitcoin, the world’s largest cryptocurrency by market capitalization, has once again hit a fresh 2018 low amid a greater crypto market sell-off.
On Dec. 7 at 1:00 UTC, bitcoin (BTC) dropped by 11.46 percent to find a bid below $3,500 at $3,306 surpassing the prior low of $3,640, according to CoinMarketCap.
Bitcoin Drops Below $3.4K
In the last 24 hours, bitcoin’s market capitalization has dropped by $4.8 billion over a 24-hour period and is down more than $14 billion on the week, indicating stop-losses being hit and traders storing their portfolio in stable coins.
As such, the move marks a continuation of selling activity that traces back to bitcoin’s breach of $6,000 about a month ago, a trend largely mirrored by the wider cryptocurrency market.
According to data, bitcoin has now erased the largest portion of its October, November and December 2017 bull run gains and is effectively down 84.28 percent from its all-time highs of $19,781. Further, Bitcoin has now dropped 64 percent year-over-year.
Ether Price Now Down 94% from January’s Record High
The price of ether fell to 19-month lows just over $80 today and is now down 94% from its January peak.
Ether’s dollar-denominated exchange rate (ETH/USD) slipped to $81.30 at 02:15 UTC – the lowest level since May 2, 2017. As of writing, ETH is trading at $83.00, representing a 17.8 percent drop on a 24-hour basis. Just three weeks ago, it was teasing a short-term bullish reversal above $200.
That key support (now resistance), however, was breached on Nov. 14, as bitcoin’s drop below the crucial support of $6,000 dashed hopes of a major bullish reversal, leading to broad-based risk aversion in the cryptomarkets.
Ether prices have dropped close to 60 percent in the time since and are currently down a staggering 94 percent from the record high of $1,431 hit in January.
Notably, ETH/USD short positions on cryptocurrency exchange Bitfinex rose to a record high above 340,000 soon before press time – up 183 percent in the last three weeks. Meanwhile, long positions have dropped to the lowest since Sept. 12, as seen in the chart above.
Such extreme positioning is usually a sign of oversold conditions and presages market bottoms. However, calling a bullish reversal with that information alone could prove costly.
The outlook, therefore, remains bearish until a more credible evidence of trend reversal emerges.
As seen above, ETH created a small doji candle last week, implying bearish exhaustion. That pattern, however, has been invalidated with the drop to 19-month lows.
Moreover, ether has found acceptance below $102.20 (low of the doji candle), meaning the sell-off from $200 has resumed.
The chart also shows that 5- and 10-week simple moving averages (SMAs) are trending south.
As a result of all these bear indicators, ETH may extend the decline toward the next major support lined up at $59.00 (March 2017 low).
We can, though, expect the momentum may weaken somewhat, as the 14-week relative strength index (RSI) is reporting oversold conditions for the first time December 2016.
- ETH may test crucial support at $59.00 (March 2017 low) in the near-term.
- With oversold readings on the weekly RSI and bearish sentiment at record highs, there is always a risk of a sudden corrective rally. The outlook, however, would turn bullish only if ETH violates the recent bearish lower-high pattern with a daily close above $128.00 (Nov. 28 high).