[ad_1]
Cryptocurrency market is moderately down and the pullback continues to persist so far on the back of a relative pickup in risk aversion, which appears has triggered massive profit-taking since last night.
The overall sour mood is not just confirmed to the crypto market as ASX 200 index, European equities and commodities, including crude oil are down. The bond market and fiat currencies appear to be stable for now against the falling risk appetite.
From massive selloff volumes, it appears many traders and speculators are moving to lock in gains now before a potential selling spree that could be triggered in anticipation of President Joe Biden’s capital gains tax (CGT) hike.
The CGT rise would negatively impact crypto or stock holders who are sitting on large amounts of unrealized gains, and was expected to encourage profit taking before the proposal is legislated. The move makes sense since the tax would later disproportionally affect sellers of the assets that have generated massive unrealized gains.
As of press time, Bitcoin (BTC) is changing virtual hands at US $55,400, Ether (ETH) at US $4,000, ripple (XRP) at US $1.45, Binance Coin (BNB) US $661, cardano (ADA) at US $1.69, Dogecoin (DOGE) at US $0.49, ChainLink (Link) at US $47, UniSwap (UNI) at US $37, Polkadot (DOT) at US $37 and Stellar (XML) at US $0.63.
As reported earlier based on the technical indications, the upwards traction in the market was mostly out of steam as the sustained rally over the past days had pushed valuations to levels considered as overbought thresholds by many traders and speculators.
Overbought is a term used in RSI technical analysis to describe a condition when an intensified buying pushes the price too far up usually after a sharp percentage increase in short period of time. The RSI provides signals that tell investors to buy when the currency is oversold and to sell when it is overbought.
Note a pullback should not be confused with a reversal as a pullback is a temporary pause or dip which might actually quickly turn into an upward momentum while a reversal is a more long-term drop against the otherwise prevailing trend. It happens because bargain hunters usually see pullbacks as an opportunity to top up their wallets and support the price upwards. Some indicators, including moving averages and pivot points can be used to decide whether a pullback is actually turning into a reversal.
It is important to note that the range in price swings at the moment shows any possible pullback would likely be limited in the magnitude due to strong support under the current levels.
Risk Warning: Cryptocurrency is a unregulated virtual notoriously volatile asset with a high level of risk. Any news, opinions, research, data, or other information contained within this website is provided for news reporting purposes as general market commentary and does not constitute investment or trading advice.
[ad_2]
