Crypto Market Review, October 5
Positivity in the cryptocurrency market is fading after investors are hit by the first increase in selling pressure
The cryptocurrency market recovery we saw yesterday may be in its final stages, considering the state of most digital assets we see today. Even a strong price development on assets such as DOGE does not seem to have a strong foundation underneath.
DOGE’s rally is purely speculative
Despite the strong 7% price increase we saw yesterday, Dogecoin shows no signs of a notable breakthrough and is already losing more than half of its value in today’s trading session.
The problem with the current price increase is the main reason behind it, which is the potential completion of Elon Musk’s Twitter purchase. In the past, some crypto enthusiasts have suggested that Musk would bring DOGE or another cryptocurrency to the social media platform.
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However, according to court documents, Musk does not think implementing digital assets on the platform is a good idea considering all the congestion and security issues that users of digital assets face outside of regular platforms.
The lack of fundamental support and questionable growth fuel creates an immediate profit, taking on the memecoin, which is why we see a return below the exponential moving average.
From a technical point of view, Dogecoin will continue to move in the extended consolidation channel formed back in June. In the long term, DOGE has been moving in a strong downward trend since 2021, and unfortunately shows no signs of a reversal since April this year.
Bitcoin rejected by resistance
Bitcoin’s run towards the 50-day moving average can be seen as another attempt to break through the downtrend formed since last November. Unfortunately, bulls failed to push the first cryptocurrency above the important price level.
The increase in selling pressure pushed the asset back to the $20,000 threshold and will most likely lead to a return to the strong support level around $19,200. Trading volume profiles suggest that the digital gold is not interesting for investors, as the risk around the cryptocurrency market is still unreasonably high to invest in institutional quality funds.
Ethereum repeats after BTC
Despite the disconnect we saw in the pre-merger period, Ethereum’s dominance fell massively, considering the deterioration in price performance and the growing dominance of Bitcoin in the market.
Over the past 24 hours, Ethereum has lost around 1.3% of its value after failing to break through the local resistance level reflected in the 50-day moving average. Unfortunately, Ether remains in the 53-day-old downtrend that began after the successful installation of the Merge update.
Unfortunately, Ethereum is not showing anything exceptional and will most likely continue to move downwards until the market recovers as a whole.
