Earlier this week, the crypto markets rose slightly and were able to regain much of their recent losses. This relatively small pump got many investors who viewed it as the “Christmas rally” excited for what was to come, although the bears pushed the markets back down on December 24th.
Following this drop, the overall markets have traded sideways, and one analyst believes further downside could be right around the corner due to the current instability in both the crypto markets and the global equities markets.
Bitcoin Fails to Stabilize Above $4,000, Crypto Markets Could Drop Further in Near Future
At the time of writing, Bitcoin is trading down marginally over a 24-hour trading period at its current price of $3,785. Earlier this week, Bitcoin’s price rose to highs of nearly $4,300, which led the altcoin markets to rally, with XRP and Ethereum being two of the best performing cryptocurrencies.
Although at the time this rally looked promising, Bitcoin’s price swiftly dropped to lows of $3,760, from which point it has traded sideways.
Following the drop, The Crypto Dog, a popular cryptocurrency analyst on Twitter, told his followers that the markets don’t look too good, and that he is not going net-long on any cryptocurrencies until the market conditions change considerably.
“This looks bad. I am stopped out of $ALT positions. Holding my short. Not looking to go net positive $crypto for awhile [sic] unless conditions change considerably. Global markets in disarray, plenty of possible downside still in $crypto, I’d rather not risk the exposure,” he explained.
Although The Crypto Dog isn’t going long on the markets, he also warned his followers against opening short positions at the current price levels, saying:
“PS: this does not look like a good short entry. Don’t go FOMO into shorts here b/c Crypto Dog is posting bearish tweets.”
Altcoins Drop Amidst Bitcoin Instability
Bitcoin’s inability to stabilize above $4,000 has led the altcoin markets to drop, with most major cryptocurrencies dropping significantly from their weekly highs.
At the time of writing, XRP is trading down over 2% at its current price of $0.365. Earlier this week, XRP rose to highs of nearly $0.45, but was swiftly pushed down to its current price levels by high selling pressure resulting from Bitcoin’s drop.
Ethereum was one of the best performing cryptocurrencies during the recent pump, surging from weekly lows of $100 to highs of nearly $160, and then dropping back to its current price levels around $127. Although Ethereum has dropped significantly from its weekly highs, it is still trading up nearly 30% from its seven-day lows.
One of today’s best performing cryptocurrencies is Bitcoin Cash, which is trading up 4.4% at its current price of $169. Earlier this week, Bitcoin Cash skyrocketed to highs of $230, from which it has dropped nearly 30%.
As the crypto markets continue to trade choppily, it is increasingly unclear as to whether or not they will start off the new year on a good note.