BTC Eyes Previous Lows Near $7,000 as Markets Panic, LEO, EOS, ADA, Mar. 9Mar 9, 2020, 6:26PM
BTC saw weakness over the weekend and is threatening a return to previous lows. This has weighed on the overall market with losses in altcoins.
I noted in last weeks’ article that, The support level around $7,000 will be key for BTC if it wants to continue the uptrend that began around January 2019.
Bitcoin tried to mount a rally back to the $9,200 level but after it failed ahead of the 50 moving average, the price then collapsed on Sunday, as the markets continue to see a sell-off across the board in risk assets.
Key to this movement was a 20% move lower in oil prices as the market continues to panic over the Coronavirus impact on the global economy. Russia and Saudi Arabia failed to agree on a reduction to crude oil production and this led to a drop in the market price.
BTC was trading 2.5% lower on Monday at $7,900 and this is dragging the cryptocurrency market lower. I noted recently that BTC had disconnected from gold and lost its status as a safe haven. Gold spiked to $1,700 on the day but has since pulled back to the $1,667 level.
Bitcoin’s weakness sees the world’s number one cryptocurrency down by 11% on the week and this has led to similar losses across the board with Bitcoin SV and Litecoin down almost 20%.
BTC may now look to test the $6,500 to $7,000 level next. The May halving will be on traders’ minds once this panic recedes and that could provide price support later in the month.
Some traders are blaming the BTC price fall on a scam by PlusToken but it’s clear with the rest of the financial markets selling off hard that this is not the cause.
The only coin in the top 20 cryptocurrencies by market cap is LEO. The coin is showing a gain of 3% overall for the week.
LEO is now trading at $0.9858 as the coin continues to bounce from recent lows. The current market cap of the coin is near $1 billion and the coin has crept into the top 20 coins at number 14. LEO is the native token of the Bitfinex trading platform and the reason for LEO’s strength may be related to a move to delist certain tokens from the exchange. The price of LEO still lags behind that of Binance’s coin (BNB), which trades at $16.00 with a market cap of $2.5 billion. These coins would benefit from more mainstream adoption of crypto and increased trading volumes.
The 24-hour volume in Binance was near $3 billion and was only $387 million in Bitfinex, so Binance is obviously the key player between the two.
LEO has made a play for the $1.00 figure in the last two days but the price is hinting at failure and that would likely see the coin track the markets lower.
EOS started the year well with rally levels near $2.50 to over $5.00 but the market has pulled back recently and may even see those $2.50 levels again if the market continues to fall. EOS is now testing the $3.00 level and is looking for support to come in. EOS is still in the top ten crypto coins with a market cap of $2.7 billion. Binance coin BNB closely follows with a valuation of $2.5 billion.
The EOSIO blockchain is striving to remain one of the dominant chains in the industry and the project has been laying out a strategic vision for this, where it states,
We will continue to explore vertical and horizontal scaling solutions to enhance performance.
Scalability has always been one of the key talking points in the blockchain industry and any project that continues to provide scalability will undoubtedly outperform other projects.
The price action in Cardano is similar to EOS after a strong start to the year saw the coin trading doubling from $0.035 to $0.070. The bearish activity of Bitcoin has weighed on markets and ADA now trades at $0.040 but could be looking to test the late-2019 lows in BTC cannot mount a comeback.
Cardano is positioned as a smart contract platform and the company’s founder Charles Hoskinson spoke recently about a potential stablecoin saying,
If we do this, then it will blow everyone out of the water. I started in this space with stablecoins and we've been thinking about them for seven years.
The stablecoin would be a version of DAI that is run on the Cardano platform. A legal leader at the accounting firm PwC has been vocal about his support for the Cardano project and the two companies have been linked in the past with Hoskinson visiting the company’s London office recently.
The price of BTC will be key ahead of the halving and some of these altcoins may provide good buying setups if the leading coin can find a base and mount a rally ahead of the May event.
Disclaimer: information contained herein is provided without considering your personal circumstances, therefore should not be construed as financial advice, investment recommendation or an offer of, or solicitation for, any transactions in cryptocurrencies.