Crypto Market Plunges After a Week of Modest Gains
After a few days of recovery, the cryptocurrency markets crashed again on Wednesday. Major cryptocurrencies such as Bitcoin and Ethereum lost around 10%. More liquidations are expected to occur as investors become more aware of the risks in the ecosystem.
Ethereum Price Action
Despite attempts by bears to drive down prices, Ethereum managed to hold its head above the water on Wednesday. The cryptocurrency hit a high of $1,200 during the session. ETH is currently at $1,129.50, which is a decrease of 0.5% from its previous week. However, it is still above its previous high of $1,228.88. Despite the drop in the price of the currency, bulls could keep the ETH/USD pair above its previous support area of $1,170.23.
Bulls have heavily favored the market over the past few days. However, it is important to note that a 40 percent increase in ten days can be read as constructive, and it is possible to see a possible reversal. Currently, ETH is trading below the resistance zone of the daily chart.
Shiba Inu Hops By 45%
Despite the odds, Shiba Inu has increased its value by 45% over the past week. The cryptocurrency is currently trading at $0.00000975. Dogecoin’s market cap briefly exceeded that of Tron. Despite the recent rally, both Ethereum and Bitcoin could not maintain their gains.
According to Arijit Mukherjee, the founder of Yunometa, Shiba Inu is benefiting from the mood recovery in the market and hints of bottom fishing. He noted that the coin’s popularity on social media could also be one of the factors that led to its price rising.
Terra’s Suddenly Climbs 800%
The collapse of Terra’s project, estimated to be worth around $40 billion, has led to the creation of a new stablecoin called TerraClassicUSD. This new digital asset has been performing well in the past week.
The US dollar lost its value against the UST in May after withdrawing funds from the lending and borrowing platform known as Anchor Protocol. As of June 15, the token was trading at $0.005 on the cryptocurrency exchange Kraken.
The value of USTC went up significantly after it started recovering from its initial losses. According to data from coinmarketcap, its capitalization has increased from $65 million to $767 million since June 29.
Despite being an abandoned token, USTC is still functioning as a functioning asset following Terra’s launch of a new blockchain, including the creation of LUNA 2.0, in May. The older version of LUNA, now called Terra Classic, saw its market value increase from around $160 million to almost $767 million in June.
Bitcoin Dips Below $20,000
Bitcoin hit a low of $19,850 on Wednesday, its first close below $20,000 in over a week. It then recovered slightly to trade at $20,112. The selling pressure in Asian stocks triggered by global economic concerns raised the prospect of more downside.
Despite the lack of positive signals from the macro economy, the flagship cryptocurrency is still expected to revise the lower end of its descending channel over the next couple of weeks.
The weekly chart indicated that the Bitcoin price is headed for a potential drop to the next support level at $22,403. The formation of a descending parallel channel also added to the negative outlook. If the bears maintain their aggressive resistance at this level, then the price might drop to the next support level at $15,800.
If Bitcoin breaks the lower end of its channel, it could target the next support level at $19,850. However, increasing pressure on the price could cause it to test the channel’s upper boundary at $12,522.