During today's session, we can observe a clear risk-off sentiment also in the cryptocurrency market. No particular information hit the market, so the decline was mostly likely caused by the liquidity, or rather the lack of it - due to the long weekend in the US and the emergence of a new variant of the coronavirus. The worst performer is Litecoin the price of which has dropped 12%, while Ethereum lost 10% and Bitcoin fell 7%.
Cryptocurrencies under selling pressure. Source: xStation5
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From a technical point of view, there is no need to panic yet. The currently observed move should be treated as a correction in the main uptrend. It is true that breaking the lower limit of the 1:1 structure may indicate a deeper pullback, but only breaking below the $ 52,800 level, which remains a key medium-term support for demand, could lead to a bigger sell-off. Should a break below this level occur, then downward move may accelerate even towards $41,000.
Bitcoin interval D1. Source: xStation5
Ethereum
We can also observe strong declines in Ethereum, the second most popular digital currency. However, the technical situation on the D1 interval shows that the upward trend still prevails. Nevertheless, it is worth noting that price is testing the key support zone in the $ 4050 region again. Should the break lower occur, support at $ 3500 may be at risk. Earlier, sellers will need to deal with the lower limit of the ascending channel - the red dotted line.
Ethereum interval D1. Source: xStation5
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