CRYPTO10 Index, can a low break resume the downtrend?
Today we’re looking at the CRYPTO10 index. This index is an index available at Eightcap that combines the top 10 coins and allows you to trade that exposure just like a stock index like the Dow Jones.
Looking at the index, we can see that sellers have broken the current recovery rally. This could be a short-term break or a continuation of the longer-term downtrend. Time is needed to make that clear. One key make-or-break situation could be Jackson Hole this week. Crypto has reacted badly to high inflation, interest rate rises and a higher USD of late.
Friday, I feel, caught the market by surprise. We saw some selling last week, but Friday’s selling just snowballed into an avalanche. On Saturday, things continued lower, but on Sunday, buyers finally said enough was enough and came back into the market after seven straight lower sessions.
We see Sunday’s price action as a bit of a key right now. We have the trend break and a pattern break (refer to Bitcoin ending diagonal pattern) in play. If sellers can break last Sunday’s low, could this be the catalyst for a continuation of the current selling and could it set off a new leg in the current short-term downtrend that confirms the overall downtrend? There has been a lot of talk about the “crypto winter’ and the current recovery rally. What always got me thinking when looking at the recovery rally was how low the volatility was in most of it.
We usually think of fast wide aggressive rallies in crypto coins, but I felt that was missing to a degree in the recovery rally. Our focus remains on Sunday’s low, and if sellers break that low could we be about to see a new extension lower that continues the crypto winter?
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