Key Takeaways:
- Tesla offloading its Bitcoin holdings precipitated a crypto market crash on Aug 17.
- The crypto market started recovering afterward.
- However, some tokens recovered more strongly than others.
NEW DELHI (CoinChapter.com) — Elon Musk’s SpaceX forced the crypto market out of its relatively calm orbit of late, as a report of the firm selling its Bitcoin holdings sparked a selling spree.
A Wall Street Journal report noted that the Musk-owned firm sold $373 million of its BTC holdings.
BTC price dropped below $26,000 before recovering, erasing all its gains since June 19 earlier this year. As BTC price action often impacts the wider crypto market, other cryptos followed suit, with ETH price dropping below $1,600 to its lowest level since March 12.
Ironically, the SEC rescued the crypto market with news of the regulator greenlighting an ETH-futures ETF. Crypto tokens started recovering slightly, with Bitcoin price closing above $26,600.
However, the crash did not diminish market participants’ buying appetite. Several crypto assets showed a remarkable increase in whale activity, per data provider Santiment. SHIB, XRP, SAND, and CAKE enjoyed the whales’ attention.
Bitcoin also saw increased investor activity. Santiment noted that several large BTC transactions worth more than $1 million occurred before the market crash on Aug 17. But, the number of large BTC wallets did not fall.
Yet, only SHIB could convert the buying spree into gains on Aug 18. Other tokens that showed significant gains the day after the crash include ADA and AVAX.
BTC Correlation With Altcoins Indicates Ongoing Bear Market?
The correlation between BTC prices and prices of other altcoins has historically remained positive, except for a brief period between Feb and April 2023. SHIB price (blue wave) declined while the BTC price (orange wave) increased.
However, ADA price maintained its correlation with Bitcoin. AVAX price action has been largely similar to ADA’s but for a brief spell between July and Aug.
The high correlation between Bitcoin and other altcoins would make it difficult for investors to diversify their portfolios. Moreover, according to a 2022 Arcane Research report, a high Bitcoin-Altcoin correlation indicated risk-averse sentiment and a likely continuation of the bear market.
ADA Price Rebounds Post Crash
ADA price closed on Aug 17 with a loss of 6.71%. However, the Cardano token spiked by 4.7% to a daily high on Aug 18.
For ADA to continue the rally, the token must break above the immediate resistance near $0.27. Breaking and consolidating above the immediate resistance might help ADA price target the 20-day EMA (red wave) resistance near $0.29 before downside correction pares gains.
On the other hand, if the rally fails to continue, ADA price might drop to its immediate support level near $0.257. Moreover, the failure of immediate support might drop to the support level near $0.243 before recovering.
The relative strength index for ADA rebounded from an oversold level back into the neutral regions, with a value of 33.65 on the daily charts.
SHIB Price Recovery Faces Confluence Resistance
Meme token Shiba Inu went against the market trend after dropping 11% on Aug 17. SHIB bulls aggressively started buying the dip post-crash, indicated by the long lower wick on Thursday’s daily candle.
It seems the Shibarium launch hype is pushing SHIB prices to rally, with the memecoin spiking over 7.5% on Aug 18 to a daily high of $0.00000869 before paring gains.
The Shiba Inu token price failed to flip the 100-day EMA (blue wave) and 50-day EMA (purple wave) resistance near $0.0000087.
However, breaking and consolidating above the immediate resistance level might provide the SHIB price the impetus to target the 200-day EMA (green wave) and 20-day EMA (red wave) resistance confluence near 0.0000093 before retreating.
Yet, if the bearish pressure against the token increases, SHIB’s price might fall to support near $0.000008. Furthermore, breaching the immediate support might force SHIB’s price to drop to the support level near $0.00000727 before recovering.
The relative strength index for SHIB remained neutral, with a value of 44.59 on the daily charts.
AVAX Price Moving Inside Bullish Pattern
Meanwhile, AVAX price has been moving inside a bullish pattern called the “Falling Wedge.”
The technical pattern forms when the price fluctuates inside a pair of falling trendlines that would converge down the slope. The outcome of such downside patterns is typically a price breakout to the upside.
One key feature of the pattern is that volumes usually decline as the trendlines converge.
The upside target for the breakout is equal to the maximum distance between the falling wedge’s upper and lower trendlines. Thus, confirming the pattern could theoretically see the Avalanche token rise by over 230% to reach $35.7 before correcting.
AVAX RSI Remains Oversold
AVAX price spiked nearly 4% on Aug 18 before paring some gains. However, the recovery failed to push AVAX’s RSI back into the neutral region. Oversold RSI levels have historically preceded bullish trend reversals for tokens, which could have attracted buyers to the market.
AVAX’s relative strength index remained oversold at writing, with a value of 25.96 on the daily timeframe.
Hence, more buyers could enter the market to buy the dip, which could help AVAX price rally to the immediate resistance near $11.2.
Moreover, breaking and consolidating above the immediate resistance might help the Avalanche token price target its 20-day EMA (red wave) resistance near $12.2 before retreating.
Conversely, if the rally fails, AVAX price might drop to the support level near $10.45. Furthermore, breaking below the immediate support level might force the Avalanche token price to fall to test the support near $9.73 before recovering
