XRP, DOGE, ETH at a loss as crypto investors enter bearish mode: Crypto Market Review, August 22
Short orders dominate the market as investors set for a June-like drop
The start of the week hasn’t been as smooth as most investors and traders expected, as the bears’ dominance in the market has grown exponentially: exchanges are paying for opening long positions, the number of short positions is exploding and most cryptocurrencies are plunging.
Bitcoin on the way to $20,000
Since August 14, BTC has lost more than 12% of its value, following the abandonment of the rising wedge that served as a guideline for the price of the asset since early July. As various sentiment indicators suggested, the market was gradually recovering and betting on the coming reversal rally and the end of the long-term bear market.
Unfortunately, the number of different macro and technical factors suggests that the price of the first cryptocurrency will not recover as quickly as some market participants thought. With the rally in the US dollar, enormous pressure has emerged in the digital asset market as investors withdraw their funds from risky investment tools like crypto.
Technical tools like the Volume Profile also hinted at the near demise of the rally. The lack of trading volume after the first cryptocurrency fell below the wedge pattern shows that the majority of retail and institutional investors have no appetite for accumulating more BTC, likely due to the possibility of another drop to June lows.
For now, Bitcoin has fallen even further and tested the $20,000 price range. Fortunately, investors pushed the first cryptocurrency back above the $21,000 threshold. The most likely scenario after the plunge is consolidation, which will show market intentions.
According to funding rates on exchanges and the number of short and long orders on derivatives trading platforms, bears are clearly dominating the market as the majority of open positions are short positions.
The reason behind the negativity is the likelihood of another plunge similar to what we saw in June. On May 13, Bitcoin entered the upward consolidation range and the market expected a gradual recovery after that. Unfortunately, the first cryptocurrency found no support and fell, losing over 40% of its value at that time.
Today’s scenario is somewhat similar to the May-June period, as Bitcoin also broke out of the ascending range and is now rapidly losing value. The main difference between the two scenarios is a lack of trading volume and volatility in the market, which works against a potential 30-40% drop.
Altcoins on reviews
As expected, altcoins are tracking the performance of their “big brother” as XRP is down 4% in price despite Ripple’s latest court success. Memecoins like Shiba Inu and Dogecoin are also rapidly losing value as hope for a market recovery has been completely dismissed.
We mentioned earlier on U.Today that the performance of meme currencies has been reduced to zero as SHIB and DOGE have returned to values we saw before the 30% price increase that took place on August 14th. .
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