The recent cryptocurrency market crash had a big impact on the overall market cap, which lost around 150 billion within 24 hours. This comes after an anticipated Tweet from Elon Musk disowning Bitcoin. In turn, Ethereum crashes more than 13%. What drove this specific crash and what will happen to Ethereum prices?
Ethereum Crash – A Heavy Retracement
Prior to that current crash, Ether was going up on a steady and solid uptrend, coupled with good technicals and fundamentals. In figure 1, we can clearly see a that black uptrend line. It all started when prices went lower than that uptrend line and failed to gain the momentum upwards.
Prices in fact fell all the way from a high of USD 1,800 al the way to the USD 1,440 price level, which in fact represent a VERY IMPORTANT area. In figure 2, we can see how this importance is apparent, and how it previously represented a strong support and resistance areas for more than 5 times already, in a span of 1 month.
The Importance of ZOOMING OUT
Looking back at figures 1 and 2, one cannot but enter a FUD state of mind and start selling everything. In fact, this is the main reason why most traders and investors lose money, and they get so emotional, that they fail to look at the bigger picture, and zoom out. Take a look at figure 3…Does this look like a downtrend? Does this portray Chaos? Not really. In fact, when prices have a similar behavior upwards, we deem it normal, but when the same thing happens downwards, it’s out-of-the-ordinary.
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Rudy Fares
