Sat. Aug 13th, 2022

Cryptocurrencies continue selling pressure over the weekend

Heavy selling pressure continues across the aggregate cryptocurrency market. At the time of writing this article (0957 EST), extreme pressure to sell off this market continues. The current losses we see on the major cryptocurrencies are:

Bitcoin (BTC) -4%

Ethereum (ETH) -3.69%

Litecoin (LTC) -5.12%

Basic Attention Token (BAT) -5.17%

Cardano (ADA) -5.92%

EOS (EOS) -5.18%

ChainLink (LINK) -6.42%

NEO (NEO) -7%

Stellar Lumens (XLM) -6.85%

0x (ZRX) -2.42%

This selling comes after a series of sharp sell-offs last Thursday and Friday (November 21st and November 22nd). UK news outlet the Independent reported that drop Friday was mysterious, especially given the very positive trading results of 2019. Thursday saw a drop of -5.86% of the total market cap, while Friday saw a decrease of -4.65%. Presently, the total market cap has lost -17.35% for the week – and it looks as if that loss may deepen into the NY session. If the weekly candlestick does close near -17.50% for the week, then this is the second-lowest weekly loss of 2019, the worst being -19.40% during the week of September 23rd, 2019. This would also be the fourth consecutive week of the close being less than the open.

Crypto’s worst 4-week stretch in history.

The chart above is the total market cap of cryptocurrencies. The current consecutive bear week run that the crypto market is experiencing is currently tied for the longest consecutive losing streak – but the loss is more significant than the prior four-week stretch (-23.58% vs. -20.96%). We can also see that as price has been dropping, the volume has been increasing. The initial reaction to falling prices and rising volume is extreme and sustained bearish pressure. However, we should take into account the length of the current selling pressure and where the recent increases in volume concern that length of time. The cryptocurrency market is transitioning into its twenty-second week in the current corrective move from the 2019 high in late June. Since that June 2019 high, prices have fallen, and volume has decreased. But if we look at the last four weeks and the new 5-month lows that have been generated, we see the weekly volume has increased. This is an indication of an impending bottom occurring. The condition of falling prices with volume increasing is a classic volume-based study. If the old saying, ‘Volume precedes price’ is true, then the rising volume will yield rising prices. Trader and investors will likely be watching this present value area of 186 because this was the final support level in 2018 before the flash crash and capitulation move that occurred in November and December of 2018. Bitcoin appears to be setting up for an anniversary repeat of another major collapse and wipe in value. If that were to occur, then we could certainly see a significant panic cycle being where the lows of 2018 are breached, and we create another -50% wipe below that value area, with a return to the 50 billion market cap value area. At that point, it will be interesting to see if this cryptocurrency market will be able to survive such a wipe of account values.