After two days of generally positive market performance, the cryptocurrency markets have fallen slightly with most major cryptos trading down 4%. Despite this, the markets are still sitting off their recently established lows, which may still be a potential long-term bottom.
At the time of writing, Bitcoin (BTC) is trading down 6% at its current price of $4,040, down from its recent highs of just over $4,400. Although it is trading down today, it is still up over 10% from its recently established 2018 lows of $3,600.
According to one research firm, today’s drop could be the direct result of traders booking profits on their short-term long positions, which means that the upwards relief rally could continue in the days ahead.
While speaking to MarketWatch, analysts at the UK-based research firm FX Pro Insights explained this possibility, saying:
“Many market participants have decided to take an optimistic approach and BTC’s decline to $3500 was an important support point for the cryptocurrency.
Within this context, it should be noted that speculators may soon begin to profit from this trend, which may trigger a new wave of sales. The real question is: Has the crypto market indeed reached the bottom?”
As discussed in yesterday’s market update, Bitcoin’s current price action could be the early stages of a larger trend, which could mean that a new upwards price cycle is right around the corner.
Rob Sluymer, a technical strategist at Fundstrat Global Advisors, discussed this trend, saying:
“In contrast to bounces that have developed through 2018, weekly RSI [relative strength index] is now at levels not seen since BTC’s last bear market low in early 2015 and BTC is showing very early evidence of responding to its long-term uptrend after three major downside moves through 2018. Our expectation is that BTC is in the very early stages of establishing a multi-quarter bottoming process that is likely to extend well into mid-2019,”
adding that further analysis of Bitcoin’s future price action is needed to validate this possibility.
Altcoins Drop Across the Board
Following Bitcoin’s lead, altcoins are currently trading down across the board, with most trading down approximately 4%.
At the time of writing, XRP is trading down 4% at its current price of $0.363. XRP is still sitting well off its recent lows of $0.32 and is trading significantly above its 2018 lows of $0.32, which were first set this past August, and revisited the following month in September.
Stellar (XLM), which has been one of this week’s best performers, was unable to dodge today’s market conditions and is currently trading down just under 5% at its current price of $0.16. XLM is currently battling with Bitcoin Cash (BCH) for the number four position by market capitalization, and the two cryptocurrencies have traded spots multiple times over the past day.