Is the wild ride still on for these five cryptocurrencies? - Kalkine Media

May 20, 2021 03:02 PM AEST | By Aayush
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Summary

  • The crypto space seems to have taken a tumultuous U-turn, having enjoyed a one-sided rally since October last year.
  • China has knocked out the crypto bulls off the ring by banning cryptos completely.
  • On the charts, Bitcoin is being seen as a falling knife with extreme volatility.

On Wednesday, the world witnessed a bloodbath in the entire crypto space. Most of the first-time investors in the crypto space have seen why cryptocurrencies are known to be the epitome of volatility. For instance, Bitcoin plunged almost 30% on Wednesday, to a low of US$30,000, after slipping from the high of over US$43,500.

Image Source: ID 118607523 © Photojk21 | Megapixl.com

The crypto space seems to have taken a sharp U-turn after a one-sided rally since October last year. Till, last month everything was going smooth for the crypto bulls but suddenly the tide turned, leaving investors with bleeding long positions. So, is it all over for the bulls like the peak of 2018 (with more pain on the cards for investors) or is it just a dip to be capatilised? And more importantly, what’s behind this sudden fall?

Read More: Elon Musk’s Flip-Flop Relationship with Crypto Oozes Irony

Bitcoin, being the bellwether of the crypto world, is a primary trend decider for all other tokens. It won’t be a hyperbole to say that if Bitcoin sneezes, the entire crypto world would catch cold. The selling rout in the crypto space has primarily taken place because of dark clouds looming over Bitcoin, which were to a large extent, ballooned by Tesla boss Elon Musk.

A few days back, Mr Musk said that Tesla, the largest automaker, would no longer be accepting Bitcoins as a payment, citing its “high energy consumption”. Bitcoin mining requires high-powered machines, which consume equally high levels of energy. After which, a one-word tweet by him implied that Tesla might have sold its Bitcoin Holdings, which was another blow to the sentiments of the crypto market. However, he later clarified on Twitter that he had not sold any Bitcoin holdings.

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These tweets from Elon Musk, who has arguably played the most important role in lifting some of the most renowned coins like Bitcoin, Ethereum and very recently Dogecoin, took investors aback.

And now China has knocked out the crypto bulls completely off the ring with its new regulator policies around cryptocurrencies. China has ordered payment companies and other financial institutions to stop providing services related to cryptocurrencies. This move to completely ban cryptos triggered panic selling, leading to the largest fall in the crypto space this year.

Read More: Chinese ban adds to Bitcoin’s woes, price sinks 8%

Let’s take a dep dive into five cryptocurrencies to gauge their trajectory after this selling rout.

  1. Bitcoin (BTC)

The largest crypto currency has tumbled around 42% from its all time high of ~US$64,800, trading at the current market price of US$37,294. This technically infers a bear market, although the threshold is just 20% off the all-time high.

Image Source: ID 100851881 © Cegli | Megapixl.com

On the charts, Bitcoin has become a falling knife coupled with extreme volatility. Trying to circumnavigate this ferocious selling is no less than standing in the way of a raging bull. So, is it the right time to go short? Extreme volatility makes it challenging to avoid whipsaws, therefore, requires very high level of trading skills to manoeuevre through these moves.

Read More: Will environmental concerns pave the way for Bitcoin to get greener?

  1. Ethereum (ETH)

Ethereum or Ether is the second largest cryptocurrency, which is in the same boat as that of Bitcoin. Ethereum plunged by a massive 27.6% on Wednesday, on one of the highest volume days of the year, depicting mass participation during this sell-off.

Unless the sentiments around Bitcoin do not improve, Ethereum is also expected to continue its selling rout. On Thursday, it is further down by 6% to US$2,303 and trying to catch a bottom here could be risky.

  1. Dogecoin (Doge)

Dogecoin is one of the hottest cryptocurrencies lately. With many jumping on the Dogecoin bandwagon, its price has rocketed by nearly a whopping 16,000% this year, from US$0.0046 to the high of US$0.74.

Despite a 30.5% crash witnessed on Wednesday, Dogecoin continues to sit pretty at sky-high levels and is nowhere close to a bottom mark. It is still trading above its 200-moving average, which is a bit of relief for the investors.

Read More: Dogecoin explained: All you need to know about the meme currency

  1. Ripple (XRP)

Another popular token that has seen panic selling is Ripple. The volume activity in Ripple reveals this token is soaring in popularity among the crypto community.

Ripple fell around 29.5% on Wednesday and by another 10.6% on Thursday (as of 11:54 AM AEST). Despite continuous fall, the Ripple should not be considered oversold yet.

  1. Tether (USDT)

According to Coinmarketcap, Tether has become the third largest coin, having market cap of around US$58.4 billion. Tether is one of the very few coins that were not affected by the mayhem in the crypto space. However, it did portray high volatility on Wednesday, moving on both sides.

The coin trades around a dollar mark but has been trading around the same level for a long time.  


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