The big correction that hit the cryptocurrency market this week was driven by the price of Bitcoin (BTC) which in minutes went below US$44,000, falling more than 10% when most analysts predicted a new historic high.
This correction in the BTC price led I get a large part of the cryptoactive market which also saw the value of many altcoins plummet along with Bitcoin.
However, although market experts have stated that the fall it is actually a healthy correction for the market the short-term trend does not reflect a recovery in the value of cryptocurrencies, they point out.
Thus, analyst Filip L. of FXStreet, who was right in his prediction about the fall of the BTC, is pointing out 4 cryptocurrencies that he tells traders to stay away from in the short term as they can see their price go down even further with drops of up to 40%.
According to him, one of the cryptocurrencies that continue in a downtrend is SafeMoon which has been registering negative movements for eight consecutive days and according to him, the price action seems to be slanted to the downside, with several factors in favor of further decline.
“The red rising trendline originating on August 28 is acting as the backbone for further losses. Although buyers have tried to break the upward trendline, the 23.6% Fibonacci retracement level looked too heavy. for buyers to insure against the volume of sellers.
With the triple top formation at $0.00000352 and the 23.6% Fibonacci retracement level at $0.00000333, buyers are aware that they face limited growth potential if they ever manage to take SafeMoon to the market. positive side,” he said.
He points out that traders may try to maintain $0.00000178, the 78.6% Fibonacci retracement level, but they shouldn’t be lucky as they’ve tried that these days.
SafeMoon / USD Daily Chart
Another cryptocurrency that may continue to fall in the short term is the Axie Infinity (AXS) game token that has become a sensation among cryptocurrency investors in Brazil.
According to FX Street, although AXS is not in a bear market, it is essential to recognize that bulls in the cryptoactive have had great difficulty holding onto supports with charts indicating a drop to $50 if bears take control at once. of price movement on the AXS.
AXS / USDT Daily Chart
In the case of Solana, the analyst points out that although the cryptocurrency has reached another new record at $216, the charts are beginning to point to a bearish move as, according to him, there are several highly overbought levels in Solana’s oscillators.
“First, the weekly Relative Strength Index is at 91.80 – above the second overbought condition in a bull market. The Relative Strength Index on the daily chart has been trading between 80 and 90 since Aug 28. A rising pattern of wedge has now formed on the Relative Strength Index, pointing to an imminent sell-off,” he said.
Also according to the expert, Optex bands are extremely overbought and have been traded in overbought condition since September. Thus, a move below these levels will likely trigger the final oscillator for violent corrective action.
“The first support zone Solana is likely to reach is the $115 value area. This is because the weekly Tenkan-Sen, Kijun-Sen and 38.2% Fibonacci retracement exists within the $115 price range,” he said. .
SOL / USDT Daily Chart
The fourth cryptocurrency on the FX Street analyst’s bearish list is the Shiba Inu (SHIB) which despite the recent rally is also likely to decline in the near term as bears take control of the cryptocurrency price.
“The price action is being pressured from below, with the green rising trendline pushing prices up. highs and is even making lower highs for three days,” he said.
The analyst points out that bears can win this fight on price pressure and that can lead to a big push down towards $0.00000550.
SHIB / USD daily chart
Last week, after breaking the $52,000 resistance, market confidence in bitcoin was high, with the cryptoactive expected to reach $60,000.
“However, overnight, ‘the house fell’ and the BTC underwent a strong correction, almost reaching the support of US$ 42.7 thousand”, stated Wander Guedes, Head of Crypto Prime Brokerage at Transfero, a company stablecoin BRZ broadcaster.
In his analysis, the drop was a reflection of the increase in sales at a time when the currency was at a higher level.
Among the reasons is the fact that, on September 7, El Salvador officially became the first country to adopt bitcoin as its legal currency. On the same date, the BTC was corrected, which represents a classic example of ‘buy the rumor, sell the news’ – or ‘buy the rumor, sell the news’ – in the financial market.
“The expectation that bitcoin would, in fact, become a legal currency in a country, led many investors to buy BTC. So, when the rumor became a fact, many realized their gains”, pointed out Guedes.
According to him, there was additionally the sell off (sales) of miners, which impacted the global crypto market. More than US$418 billion were paid, as can be seen in the graphical analysis.
“There was a quick recovery, with bullishes taking advantage of the ‘buy the dip’ movement,” Guedes said.
In his analysis, much of this recovery occurred through Altcoins, especially Solana, which saw its marketcap reach the level of US$ 55 billion, reaching the top 6 position in the global cryptocurrency market.
“It’s always good to be on the lookout for a possible trend reversal. In this case, however, despite the decline, there was no strong indication that we had entered a bearish move. Proof of this is that in the last 24 hours [considerando a data de 9 de setembro, quando esta matéria foi escrita], the main instruments traded in options were Calls”, pointed out the specialist.
For Guedes, what happened last week was a one-off correction, “even seen with good eyes by many investors, especially those who are now arriving in the crypto market and who are looking for new buying opportunities, not just bitcoin”.
In his opinion, the corrections are of fundamental importance for bitcoin to reach new ATH (All Time High) marks, or record prices.