Bitcoin Plunges as Appetite for Rival Cryptocurrency Tokens Grow

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Bitcoin edged lower for the third straight day and established a fresh weekly low, levels right below $9,200 during the late Asian trading session on Tuesday.

The benchmark cryptocurrency extended its ongoing retracement move from its local swing top established on Sunday above $9,600. Part of the plunge came on profit-taking. Other reasons that attributed to bitcoin’s fall included easing risk-on sentiments globally, as well as rival cryptocurrency tokens that appeared more bullish.

ICX, for instance, registered around 60 percent gains in the past 24 hours (data from CoinMarketCap.com). The ICON blockchain token’s upside move brought its two-week gains above 200 percent. That allowed traders to exchange a considerable portion of their bitcoin holdings for ICX.

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ICON stole bitcoin’s limelight this week | Source: TradingView.com, Binance

The ICON/BTC exchange rate was up 61 percent on a 24-hour adjusted timeframe.

More Losses for Bitcoin

Coins like ICON could fall on profit-taking, which may move the capital back to bitcoin. Nevertheless, the top cryptocurrency needs a better-suited macro narrative to uphold its gains. As of now, the safe-haven sentiment is not working to its full potential.

Efforts by China’s central bank to handle the economic impact led by the Coronavirus outbreak has sent investors back to risk-on assets, such as equities. After a bulldozing fall on Monday, the stock market recovered Tuesday on such assurances. That also had a negative impact on Gold, bitcoin’s mainstream rival.

Meanwhile, investors also remained glued to the US dollar owing to a stronger-than-expected recovery in the US ISM Manufacturing PMI.

Bitcoin could now attract buyers at lower levels. But for that, the cryptocurrency has to fall further to attractive support areas, particularly the ones that behaved as resistance during its uptrend.

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Bitcoin eyeing a fall towards 200-DMA | Source: TradingView.com, Coinbase

The first support level that bitcoin is targeting now is the lower ascending trendline of the Rising Wedge pattern. More likely, the cryptocurrency could retest it for another pullback towards the upper ascending trendline. But technically, since the Rising Wedges are bearish continuation patterns, the price could eventually break below the lower trendline.

Such a move could have bitcoin shift its support-base to the 200-daily moving average (the blued wave). In a bull market, the cryptocurrency has historically remained above the 200-DMA. Traders can, therefore, treat it as an accumulation range.

On the other hand, a close below 200-DMA could trigger a sell-off until the price reaches the 50-DMA below (the blacked wave).

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