Cryptocurrencies Meltdown But Selling Likely Overdone

FXOpen

Cryptocurrencies hit new lows today as the losses accelerated. Bitcoin hit $162 per coin, Litecoin fell to a low of $1.05 and Peercoin was quoted at $0.24 few hours ago. As expected, the break of the important BTC/USD support at $266 sent bitcoin in a tailspin, falling over $100 dollars in two days, a loss of almost 40 percent! The altcoin meltdown was equally as damaging. As we’ve said before, $266 is a previous swing for BTC that was the highest high for most of 2013. It was also the breakout point for bitcoin’s latest major rally from $266 to a high of $1090. A break below here means that all the gains of that rally (and more) have now been invalidated.

Peercoin Falls 46 Percent

In our last PPC update one week ago, we mentioned that we would need to a see a break of $0.45 for a resumtion of the downtrend. Since then, the crypto fell below $0.45 and proceeded to lose over 46 percent, falling to a low of $0.24 earlier today. But there are signs that the selling may be overdone.

PPCUSDH1-jan15

Since the $0.24 low was reached, PPC/USD rallied by over 35 percent to $0.32. We have formed somewhat of a V-shaped reversal pattern. This doesn’t mean that going long here is a good idea. I never advocate going against the prevailing trend which on the medium and longterm timeframes is still down. But on the short-term, the losses may be overdone, evidenced by the strong retracement. A PPC/USD move to new lows below $0.24 would invalidate this view and likely lead to more losses.

Litecoin Hits $1.05

Alternative cryptocurrency Litecoin hit a new low of $1.05 today. But similarly to Peercoin, the losses and today’s subsequent major reversal indicate that we may be at oversold levels. To confirm this and put an end to the downtrend, LTC/USD need to climb and stay above $1.35 per coin. On the chart below we can see that the pair has been trying to establish a foothold above here for the past two days.

LTCUSDH1-jan15

We are currently trading very close to the mark at $1.33. Again, due to strong bearish trends that are still present on the medium and longer-term charts, going long on a break of $1.35 is not advised. But in the short-term, a clearing of this level should help the bulls to breathe a sigh of relief. A Litecoin break of the $1 parity level would lead to a resumption of the downward momentum and more losses.

FXOpen offers the world's most popular cryptocurrency CFDs*, including Bitcoin and Ethereum. Floating spreads, 1:2 leverage — at your service. Open your trading account now or learn more about crypto CFD trading with FXOpen.

*At FXOpen UK and FXOpen AU, Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rules and Professional clients under ASIC Rules respectively. They are not available for trading by Retail clients.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Cryptocurrencies

Bitcoin Price Losing Correlation with Stock Market Kiyosaki Predicts: Bitcoin at $350k in August 2024. Realistic? The Price of Ethereum Rises Ahead of SEC Decision Bitcoin Price Hits a Month's High, Breaking Key Resistance April Became the Worst Month for BTC/USD Since November 2022

Latest articles

Financial Market News

Weekly Market Wrap With Gary Thomson: S&P 500 Index, US Dollar, FTSE 100 Index, Gold Price

Get the latest scoop on the week's hottest headlines, all in one convenient video. Join Gary Thomson, the COO of FXOpen UK, as he breaks down the most significant news reports and shares his expert insights.

  • S&P 500
Indices

European Stock Indices Decline Amid Political Uncertainty

Today, the Eurostoxx 50 index (Europe 50 on FXOpen) has dropped below the early May minimum, reflecting escalating market concerns over the upcoming French elections, as reported by Reuters. Finance Minister Bruno Le Maire's acknowledgment that the current political crisis

Forex Analysis

NZD/USD Exchange Rate Falls from Nearly 5-Month High

The NZD/USD exchange rate has dropped from its highest level in nearly five months. On Wednesday, following the release of US inflation data, the NZD/USD rate exceeded 0.6220 for the first time since 15 January 2024.

However,

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.