What is Causing the Decline in Cryptocurrency Prices?

The decline comes as China tightens its grip on cryptocurrencies, with officials in the southwest province of Sichuan ordering the shutdown of bitcoin mining operations. As part of

a series of financial risk-control measures, China's State Council has pledged to crack down on mining and trading. The technical analysis of the major cryptocurrencies are undermentioned;

BTCUSD

BTCUSD developed another extended upper wick after another unsuccessful upward attempt. It is now falling and has dropped to a daily dip of $32,231. BTC continues to trade in the same long-term range between $31,300 and $40,500. The 0.382 Fibonacci retracement resistance level is likewise in the upper portion of the range.

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In the last two months, Bitcoin has traded between the ranges of $30,000 to $42,000 as feelings remain subdued in the face of worries over the ecological and regulatory impact of Bitcoin mining in China.

If the price drops beneath the downtrend and tries to break below the present level or below the support, the pair may drop below $31,000. Because the bears haven't been able to close below this level, it's an important level to watch. If this occurs, it means that the bears have absorbed the demand. A breach below $28,000 may trigger panic selling, resulting in a slide to $20,000 or below.

BTC’s price is prone to volatile swings, making it historically popular for traders to speculate on. According to Bitcoin halving cycles, there should be at least another 4 months in this bull run, so if the PI indicator (and Bitcoin) might repeat a similar bull run to 2013, that would mean a local top relatively close in time and then another top to end the bull run towards mid year.

Investors and traders are finding it difficult to decide how best to utilize the current market, hodling is profitable but trading is far more profitable. Correction happens in the crypto space when a whale loses money, then they want regulation.

Indicators

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The RSI index has moved to about 42, a further depression from where it was some days back and still facing down indicating a price decline. This is however a good point away from the oversold points from last month.

The MACD indicator is still negative and showing some convergence and a sign of struggle between the bulls and the bears. The histogram has just tested the green region and its tending back towards the red region. This however is still a point below the all time moving average price of bitcoin. We expect the bulls to take over soon as the bull run period is clearly not over.

ETH/USD

For the previous three days, bulls have kept ETH above the 20-day exponential moving average ($2,219), indicating that perception is improving. The buyers are aiming to drive the price over the 50-day simple moving average ($2,369) and keep it there. If they do well, the ETH/USDT pair may rally to the descending triangle, where the potential sellers may build severe resistance once more.

If the price falls below it but then rises over the 20-day Exponential Moving Average, the chances of a break above the bearish line become more likely. But then with the many improvements in the ERC network, the pair might be in for an interesting movement in the coming periods. The average gas fee in the Ethereum chain has been at its lowest since march, 2020.

More users could be rushing back to using the network and that would most likely skyrocket things for the pair.

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A move like this may pave the way for a rise to $2,990.05. A break over this resistance level will signal the end of the correction.

If the price falls below the 20-day Exponential Moving Average and breaks underneath the present level or above resistance, it indicates that bears are trying to sell. After that, the ETHUSD may fall to $2,000 and then $1,728.74.

After hitting a low of $1,700 on June 22, ETH has been steadily rising since then. The rising trend continued until July 7, when it reached a high of $2,410. Between $1,982 and $2,064, there is support.

The 0.5-0.618 Fibonacci retracement support levels, as well as a horizontal support region, may be seen here forming a potential third lower high. The prognosis is mixed based on short-term indications. At $2,725, there is long-term resistance.

Indicators

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The prognosis is mixed based on short-term indications. The RSI is fluctuating between 40 and 50, a sign of mixed feelings for investors. The RSI is strictly facing downward heading towards an oversold point.

The MACD line is the negative zone. The MACD curve also shows a bit of divergence with the bears trying to pull the market down. This is however not unusual as it is the weekend

XRP/USD

For the previous several days, XRPUSD has been stuck between $0.63 and the 20-day Exponential Moving Average ($0.70). This close pattern trading indicates that bulls and bears are undecided about the next move.

As a result, traders appear to be avoiding huge wagers. Since the start of this month, XRPUSD has been charting a falling resistance line, which it finally broke out of a few days ago.

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It has, however, reverted to the line to confirm that it's support. It's already crossed the line twice, but it hasn't started pumping higher.

Between $0.80 and $0.87 is the nearest resistance level. These are the 0.5 - 0.618 Fibonacci retracement levels. If the price dips below $0.62, the bears will attempt to drive it down to $0.58, then $0.50.

The intensification of the decline will be signaled by a breach below the cognitive and emotional threshold of $0.50.

Indicators

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The RSI index hovered around 39, indicating that the price has been experiencing a decline in the last few days and may continue to fall at lower levels.

The MACD indicator, like many other coins, has returned to the downtrend, suggesting that the market is not yet ready to take another step upward and achieve higher price levels. Although the histogram is seen in the green region, we can see the strength fading as the moment rolls by.

LTC/USD
Shortly after achieving its all-time high, LTCUSD has fallen sharply and has been unable to find support. It's now in the midst of dismantling the $130 horizontal support area.
Technical indications are negative, and a breach may send LTC to $80, the long-term rising support line.

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Since May 2021, LTCUSD, like BTCUSD, has been following a falling resistance line.
It most recently attempted to break out (red symbol) in May of this year, but failed. The technical indicators are in a very neutral state. The trend cannot be called bullish unless LTC breaks out from this line.

Indicators

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The RSI index dropped to 37, indicating some forms of turbulence in the market in the last few days, with a strong likelihood of a further drop.
The MACD index remains in the negative threshold, reducing investor optimism about its near-term prospects.

BCH/USD

For the previous several days, Bitcoin Cash (BCH) has been holding to the $538.11 overhead barrier. A break above a hard barrier generally follows a tight consolidation near it.
In contrast to this premise, if the price drops below $475.69 and breaks below the 50-day Simple Moving Average ($596), the pair may drop below $370. For a few more days, this move might keep the pair price bracket between $370 and $538.11.

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The bulls are attempting a return, as seen by the flat 20-day Exponential Moving Average ($524) and an RSI over 46. The BCHUSD pair may begin its pump to $650.35 and eventually $800 if investors push the price over $538.11.

Indicator

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The RSI index fluctuated between 39 and 40, suggesting that the price would move in the same direction but in a downward direction. Although this is clearly still an oversold point.
The MACD indicator reverted to a negative reading, indicating that it is still correlated with the rest of the market.

Correlations

  • Bitcoin / Ethereum = 0.81
  • Bitcoin / Ripple = 0.8
  • Bitcoin / Litecoin = 0.81
  • Bitcoin / Bitcoin Cash = 0.95

Since the beginning of the month, the correlations have plummeted, demonstrating that Bitcoin's success has a rippling impact on the market. As Bitcoin fell below the compression threshold of $32,000, the rest of the market fell with it, with devastating effects for other cryptocurrencies.

Altcoins like ETH, XRP, LTC, and BCH have developed a strong connection with Bitcoin over time. This implies that if another bullish wave occurs in the near future, the market will most likely continue in the same direction. We anticipate a further rise in the correlation field in the coming days as a result of the compression.

Key Notes for Today

  • Cryptocurrencies have a positive correlation with one another.
  • A breach below the $28,000 mark for BTC may trigger panic selling, resulting in a slide to $20,000 or below.
  • After hitting a low of $1,700 on June 22, ETH has been steadily rising since then
  • XRPUSD has been charting a falling resistance line, which it finally broke out of a few days ago.
  • LTCUSD keeps falling.
  • Bitcoin Cash (BCH) has been holding to the $538.11 overhead barrier.