The virtual currency market has recently experienced an unprecedented violent fluctuation, with hundreds of thousands of investors facing liquidation and the market experiencing sharp declines and surges.
1.1 Technical chart analysis of Bitcoin (BTC) and Ethereum (ETH)
Bitcoin (BTC):
Support and resistance: Bitcoin has been oscillating between key support and resistance levels recently. According to the Fibonacci retracement analysis, Bitcoin has strong support around $30,000 and obvious resistance around $40,000. Breaking through either side may bring a new trend direction.
Moving Averages: The “death cross” of the 50-day moving average (MA50) and the 200-day moving average (MA200) is a major bearish signal, indicating possible further declines.
Ethereum (ETH):
Relative Strength Index (RSI): ETH's RSI indicator is close to the oversold area recently, which means there may be a short-term rebound. However, in the long run, if it fails to break through the key resistance level, there is still a risk of falling.
Trading volume: A sharp increase in trading volume indicates that market volatility has increased, large funds are frequently flowing in and out, and market sentiment is unstable.
1.2 Technical analysis of other mainstream currencies
SOL Coin:
Rising channel: Solana (SOL) has been rising strongly in the rising channel, but recently broke through the lower track and entered the adjustment stage. It is necessary to pay attention to whether it can return to the rising channel in the short term.
MACD indicator: MACD shows a death cross, indicating that there is heavy selling pressure in the short term and further adjustments may be possible.
BNX Coin:
Technical pattern: BNX has recently formed an obvious head and shoulders top pattern. If the neckline support is lost, it may trigger a new round of decline.
Bollinger Bands: The price has touched the lower Bollinger Band. There may be a rebound demand in the short term, but the medium-term trend remains unclear.
2. Market Sentiment Analysis
2.1 Social media and news media
Social media heat: Discussions about virtual currencies on platforms such as Twitter and Reddit have soared in popularity, especially the speeches of some key opinion leaders (KOLs), which have had a huge impact on market sentiment.
Media coverage: Mainstream media frequently reports on the virtual currency market, including both positive and negative news, which exacerbates market uncertainty.
2.2 Market Confidence and Fear Index
Fear and Greed Index: The market is currently in a state of extreme panic, and the Fear and Greed Index is close to historical lows, which usually means that there may be opportunities for a rebound, but it also reflects the extreme anxiety in the market.
Capital Flows: Large amounts of money are flowing out of the crypto market and into safe-haven assets such as gold and the U.S. dollar, indicating a lack of investor confidence.
III. Recent major events
3.1 Policy supervision
Global regulation is tightening: Many countries have stepped up their regulation of the cryptocurrency market. The US SEC is investigating some exchanges, and the European Central Bank has proposed stricter cryptocurrency regulation.
China’s Crackdown: China’s ongoing crackdown on cryptocurrency mining and trading activities has had a significant impact on market sentiment.
3.2 Project Dynamics
Risks of DeFi projects: Recently, multiple DeFi projects have experienced security vulnerabilities or capital losses, which has affected the market's confidence in decentralized finance.
Launch of new projects: Although the launch of some new projects has brought market heat in the short term, it has also increased market volatility.
IV. Future Trend Forecast
4.1 Short-term forecast
Bitcoin: If BTC can hold the $30,000 support level, there may be a rebound, but if it falls below this support, it may bottom out further.
Ethereum: ETH has strong support at $1,700 and may fluctuate and consolidate in this area in the short term.
4.2 Medium- and long-term forecasts
Possibility of market recovery: As the market gradually digests the unfavorable news and the technical adjustments are in place, the market is expected to usher in a wave of rebound.
Long-term investment opportunities: Investors should focus on projects with practical application scenarios and technological innovations, such as the advancement of ETH 2.0 and the application of Layer 2 solutions.
