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HomeCrypto NewsAnalysisMain Reasons Of Market Selloff As Bitcoin, Ethereum, and XRP Extend Losses

Main Reasons Of Market Selloff As Bitcoin, Ethereum, and XRP Extend Losses

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The broader crypto market remains bearish as top assets, including Bitcoin, Ethereum, and XRP, print consecutive losing candles.

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The cryptocurrency scene has been plagued by a series of black swan events since May, making several market watchers believe this represents the worst market year. The bearish climate remains prevalent, exacerbated by the recent FTX collapse and macroeconomic conditions.

This has led to persistent losses for most top assets, including Bitcoin (BTC), Ethereum (ETH), and XRP (XRP). While trade volume has increased by 51.78% in the past 24 hours to $50.69B, the global crypto market capitalization currently sits at $804.99B, marking a 5.36% decline in a day, per data from CMC. This indicates an increase in market-wide selloffs as investors resort to capitulation.

The Effects of the Mazars Group News and the U.S. Macro Atmosphere

Sentiments play a crucial role in market movements, and the cryptocurrency scene’s recent gloomy bearing is a testament to that. Following the FTX collapse that led to losses to the tune of billions, investors’ confidence declined drastically, leading to a wave of capitulation influenced by fear of massive declines. This capitulation moves further empowered the bears as assets plummeted to lower lows.

The market has not had the time to recover, as the after-effects of the FTX fall remain prevalent. Confidence in centralized exchanges has waned, leading to further scrutiny and a subsequent wave of FUD at the slightest sign of insolvency. Binance had been put in the spotlight, and despite proving that it is not insolvent, the FUD surrounding the world’s largest exchange lingers, leading some to believe it is a paid campaign.

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Mazars Group, the global auditing firm that handled the Proof of Reserves audits for notable exchanges such as Binance, Crypto.com, and Huobi, has erased records of their PoR audits for the crypto exchanges and announced a decision not to be involved in the crypto scene. This has exacerbated the whole bearish atmosphere. Mazars Group revealed that the decision is influenced by how the public perceives the reports.

The macroeconomic climate within the U.S. has also not been favorable. Despite the recent ease witnessed within the economic scene of late, recession fears remain dominant. The Fed has slowed down in its interest rate hikes, increasing the interest rate by 50 bps this week, but risk assets have not responded favorably. The stock market, in particular, is experiencing its worst year since 2008, with several indexes plummeting to record lows. The crypto scene has not been spared in the onslaught.

Bitcoin

Following a promising performance on Wednesday that led to a high of $18,318, BTC faced a fierce resistance triggered at the zone above $18K, causing a correction that brought the asset to a two-week low of $16,600 today. The crash on Wednesday resulted in two consecutive losing sessions, as BTC declined by 2.51% on Thursday and 4.17% on Friday. The Friday dip marked BTC’s most significant 24-hour decline in over a month since the 14% crash on November 9 at the early stage of the FTX collapse.

Despite gaining by a meager 0.47% today, the asset remains below the $17K zone, currently trading at $16,731 as of press time. To push through to the first crucial resistance at $17,274, the asset needs to reclaim and hold above the $16,912 pivot point. BTC’s second crucial resistance sits at $17,906 if the bulls receive support from good reports within the space.

Notwithstanding, sustained bearishness could see the asset fall to the first significant support level at $16,280. If BTC doesn’t recapture and hold above the pivot point, this will become a reality. The asset currently trades at $16,750 as of press time, down 4.22% in the past 24 hours. The BTC Fear and Greed Index is currently 28, indicating Fear.

Ethereum 

Ethereum (ETH) has not shown as much resistance to the bears as BTC, printing its third consecutive losing candle yesterday. The asset declined by 1% on Wednesday and shed its gains by 3.13% and 7.87% on Thursday and Friday, respectively. The Friday loss also represents ETH’s largest 24-hour decline since the 17.39% fall on November 9.

Following a decline to $1,161, ETH relied on some newly-found support to stage a 1.35% recovery today. Currently trading at $1,183, ETH’s hopes to reach the first resistance level at $1,246 are hinged on the reclamation of the $1,201 pivot point. Recapturing the $1,200 zone is likely to stir excitement in the bulls. If the momentum is sustained, the asset could reach its second resistance point at $1,325.

However, if ETH fails to reclaim the pivot point, it could be battered to the first support level at $1,122. Avoiding the territory below $1,100 is crucial for Ethereum’s price movement, as failure would see the second crucial support at $1,077 play out. ETH’s third support is at $953.

XRP

Unlike most other top assets, XRP’s price movements are not solely tied to the broader crypto climate and macroeconomic conditions. Updates on the litigation between Ripple and the U.S. SEC are crucial to the asset’s price actions. Notwithstanding, when the XRP camp is subjected to a dearth of updates on the lawsuit, the asset has been left to the swings of the broader market. The next court session is slated for December 22.

XRP, like ETH and most assets, saw its third consecutive losing session on Friday after ending the day with a massive decline of 7.12%. This loss followed a 1.89% fall on Thursday and a 2.51% decline on Wednesday. The asset began today on promising grounds, having gained by 1.14%.

At a current value of $0.3556, XRP has to push through to the pivot price point at $0.3586 to soar to its first resistance level of $0.3728. If the asset can conquer the first resistance zone, the $0.38 level could come into play if momentum is sustained, which would be a bullish level to catapult XRP to the second crucial resistance at $0.3941. Should this materialize, $0.40 could be reclaimed, as the third resistance remains at $0.4296.

If the pivot price point is not recaptured, the bears could take XRP down to the first support zone at $0.3374. If the bulls don’t act quickly, a decline below the $0.33 level would be ultra bearish, as the asset’s next support level comes in at $0.3232. If this is broken, XRP could go below $0.30, leaving its third support at $0.2877.

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Author

Albert Brown
Albert Brownhttps://thecryptobasic.com/
Albert Brown is a cryptocurrency investor and journalist who has been in the nascent space since 2017. His love and passion for technological innovations made him delve deeper into the world of blockchain and cryptocurrencies. As a journalist, Brown has written on several crypto-related topics that have been referenced by popular industry players like Tyler Winklevoss, Binance CZ, etc.

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