Crypto saw a harsh sell off on 7th September. We didn’t believe this changed the sentiment of crypto and we said prices wouldn’t go lower. So how have different coins fared since the drop. Let’s take a look at a few of the biggest.
Bitcoin (BTC) dropped just below $43,000. There was support below at $41,200, but the price moved up. The first resistance seen was at $47,000. The price tested this many times, but failed to close above on the 4hr chart. On the support side, $44,300 held and the price failed to close below. On the 15th September, the price broke through the $47,000 mark which has now become support for the price. I believe $49,000 and the $50,000 psychological level are the next resistance areas for Bitcoin. Once above $50,000, the stock should get some more volume as it sets up to test all-time highs of $64,854 later this year.
Regarding Ethereum (ETH), $3,200 was the support area. The price has failed to close below this on multiple occasions. When the price has dropped below, buying volume has come in. The initial resistance for Ethereum was $3,540. Buyers tried to take the price above this in the initial days after the drop, but never managed. When crypto saw a nice run between the 13th and 16th September, ETH broke above the previous resistance but could not reach $3,700. The price held above $3,400, which is also the 50MA on the 4hr chart. For now, staying above $3,400 and making a test of $3,700 is the key to sustain a further move above. If the price breaks above, $4,000 would be the main test, a very big milestone for Ethereum, which it had only just reclaimed before the drop. All-time high sits at $4,372, so a further 10% move could be seen after this into the close of the year.
Whilst Ethereum and Bitcoin had similar charts since the drop, Cardano (ADA) is slightly different. This was mainly due to news that investors were looking forward to. On the 12th September, Cardano launched their Alonzo update which brings many new features to the network, the most anticipated being the introduction of smart contracts. Smart contracts are pieces of computer code that automatically execute when certain predefined conditions are met. After the Alonzo update went live, anyone was be able to create and deploy their own smart contracts on the Cardano blockchain, paving the way for native decentralised applications (dApps).
Initially, ADA faced a similar situation to both Bitcoin and Ethereum. $2.25 has been a good support for Cardano, with $2.60 the main resistance. How did the release of the smart contracts affect the share price? The news helped Cardano to break through the first resistance before the previous two. Although the news for ADA is good in the long run, it proved to be a “buy the rumour, sell the news” case. After the release of the update, the price dropped 15%, but managed to close above $2.35. This has now acted as support and the price currently sits just above, $2.40 at the time of writing. The challenge for Cardano to make further progress is $2.60 and then $2.75. At $2.75, you may still have traders who bought before the release and are currently down in their trade. This could lead to selling so they break even at this price. I think the price will continue above in time and reach $3 again well before the end of this year.