Cryptos look for a direction to sustain the rebound; Bitcoin struggles at $30,000
The cryptocurrency market is swayed by what appears to be a consolidation after last week's brutal swings. A quiet Monday followed a weekend in which Bitcoin (BTC) settled into the price range that many analysts considered fair for the 'crypto', between $28,000 and $32,000, with $30,000 as the waterline it is struggling to maintain.
From a technical analysis point of view, the queen of the 'cryptos' is above the 100-hour simple moving average after it left a low near $29,060 during the May 16th session. Below, in the $29,000 area, buyers are very active, as indicated by technical analysis. In terms of resistance, the $30,300 level shows a significant barrier. It is near the 50% retracement level of the recent decline from the high of $31,390 to Monday's low of $29,060. A successful close above the $30,300 level could open the door to a decent rally.
The market as a whole sits above $1.3 trillion, while the major 'altcoins' follow in BTC's wake and Ethereum is also moving in range between $1,950 and $2,200 in round figures.
"The collapse of Terra, LUNA and UST has made crypto investors very cautious and brought back bad memories of the past," commented Naeem Aslam, analyst at Avatrade. "Terra's fall has reminded investors how risky cryptocurrency investments are, and that they should think before putting their savings into this asset class," he explained.
News on this front continues after Terraform Labs co-founder, Do Kwon, unveiled another proposal to revive the Terra blockchain on Monday, by ditching the failed TerraUSD stablecoin and revamping the project into a new network. Kwon wants to copy the blockchain code to create a new network - a division- called Terra, and distribute new tokens to former Terra supporters, such as key application developers, those whose computers order transactions on the network, and those who still hold TerraUSD. This is Kwon's second proposal to revive the network, but many experts are wary of the initiative and are not hopeful.
"However, these memories may not have a lasting influence, and this is because cryptocurrencies see a rebound," the expert commented. And if buying accelerates above $32,000, the market rally "has the ability to not only erase all previous memories, but indicates that crypto traders are highly motivated to invest more than they can afford due to their risk-to-reward ratio."
"It is also important to note that Bitcoin´s price is trading near the oversold zone as suggested by the RSI on the daily and weekly time frame," the analyst added.
The Ethereum chart, meanwhile, is shaping a bearish pennant pattern, according to 'CoinTelegraph' technical analysis, which suggests a continuation of declines. Therefore, if the price suffers a breakout at the pennant apex point near $2,030, then the bearish target of the structure will be below $1,500, more than 25% below the current price.