Wednesday, October 5, 2022

Bitcoin and Ethereum Lead a Market Downtrend as Bears Take Over

Bitcoin (BTC) and Ethereum (ETH) are experiencing a negative downtrend as both coins are leading a broader market upset in favor of the bears. Based on the price losses in the past 24 hours, the combined market capitalization of the digital currency ecosystem has slumped by 4.79% in the past 24 hours to $1.87 trillion.

Bitcoin is changing hands at $40,409.83, down 5.03% in the past 24 hours, giving a pace to Ethereum which has lost 4.83% to $2,997.26. Despite the bear grip, both assets still maintain a 60.3% dominance against other digital currencies.

Fundamental Undertone of the Ongoing Slump

The loss in price in BTC and ETH has a very definitive undertone which revolves around the perception of the retail investors for both digital currencies. With a long protracted selloff that was experienced all week long, small buyers refused to get caught in the red zone as the weekend dump approached, catalyzing the overall sell-off.

Events including the Bitcoin bonds from El Salvador that are still stalling have continued to hold back the leap in the digital currency in one way or the other. Beyond this, there has been a growing concern about MicroStrategy selling off some of its Bitcoin holdings which were pegged at a little over 125,000 when the business intelligence firm acquired 4,167 units earlier this month.

Investors, including those affiliated with Bitcoin and Ethereum, tend to lose confidence when whales sell off their holdings and some of the undertones are reflected at this time.

Where Prices Are Heading Per Technical Indicators

A look at the BTC/USD trading pair on the 4H chart shows a somewhat repressive price action as the coin is currently trading below the 100 and 200 Day Moving Averages and struggling to keep support above the 50-day line. 

BTC/USD 4H Chart. Source: TradingView

The current outlook may be short-lived as the Relative Strength Index (RSI) seem to be flashing the oversold signal at 38.79. While prices may keep below the $40,000 support level for the weekend, a bullish reversal may be experienced with a nudging in the coming week.

The ETHUSD pair also shows a similar trend as the price is just leaping around the lower trendline of the Bollinger Bands, a signal that showcases the bears are in control.

ETH/USD 4H Chart. Source: TradingView

The hopes of a bullish reversal for Ethereum are limited as the MACD line is still sufficiently trending below the signal line. While slight volatility in the positive range can change the current outlook, ETH bears may be more in control until the support level at $2,900 is breached.

Godfrey Benjaminhttps://cryptomarketsbeat.com
I'm just a nerd who wants the world to know about the unique capabilities of blockchain and digital currencies

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