That Country Manager of Bitpanda Spain, Alejandro Zalashared with Cointelegraph in Spanish its weekly analysis of the cryptocurrency market after what happened this week, which will likely go down in history as one of the worst weeks in crypto history.
According to Zala, the cryptocurrency market collapsed along with global financial markets in a selloff that caused double-digit declines in all major currencies. In his opinion, between inflation and geopolitical tensions, the macroeconomic picture couldn’t be worse for risky assets. “Bitcoin is down almost 23% over the past seven days, while some of the top 10 altcoins have suffered losses of more than 50%,” he said.
“The Crypto Fear and Greed Index is an indicator of cryptocurrency market sentiment which came in at 10/100 showing extreme fear in the market, a level previously reached in January,” he added.
Terra ecosystem crash
A serious situation that Zala put first in her analysis was the collapse of the Terra ecosystem, to which was also added the collapse of its LUNA token and the stablecoin TerraUSD (UST), the third largest in the world, which collapsed, as it broke away, the US dollar slipped below $0.30 while LUNA fell more than 95%.
Bitcoin’s sixth consecutive weekly bearish close
On Bitcoin, Zala commented that the asset closed with six red candles in a row, marking a six-week bearish close and marking the first time in eight years that a bearish trend like this has been recorded for Bitcoin as world events continue to exert pressure out on the markets. “Bitcoin closed with a doji candle and a large descending wick on the daily chart, marking a possible reversal zone. BTC found support above €27,450 and appears to have initiated an upward correction,” Zala said.
On the other hand, Zala mentioned the capitulation phase, which is usually the phase that follows a market that has bottomed and is usually associated with an increase in selling pressure and a fall in prices.
“The combined value of all cryptocurrencies has fallen by 60% since November 2021. Back then, the total crypto market cap reached $2.7 trillion, while it’s now at $1.5 trillion,” Zala said.
“Ultimately, the cryptocurrency market is reaching the opposite extreme of a ‘euphoria’ phase where a climate of panic appears to prevail, which could lead to a subsequent recovery,” he added.
Altcoins fall along with Bitcoin
Likewise, he pointed out that the market crash brought down all major altcoins along with Bitcoin. In that sense, altcoins saw even bigger losses than BTC in general.
“Ethereum has broken below the falling wedge pattern that has been in play since early April and is now attempting to form a new local bottom near levels seen earlier in the year and take the price to €1,700,” Zala said.
“It also lost some value against the ETH/BTC pair. The pair rose from 0.0767 to 0.067 in just 2 days. However, it has now risen above the €2,000 resistance zone but is still trading below the key 100 hourly SMA. resulting in BTC market dominance now being 44.5%, ETH 19.4%,” he added.
However, Zala also mentioned the other major altcoins like Cardano, Polkadot, Chainlink, Avalanche, Ripple, and Solana, which lost more than 50% of their value during the sell-off. “ADA fell below €0.45, its lowest since February 2021, and more than 80% from its all-time high of €2.97 last September,” he commented.
“Heavy selling pressure caused the DOT price to fall below multiple support lines and settled at $7, its lowest level since last summer. In November last year, the DOT reached a historic high of almost 50 euros,” explained Zala.
Zala then highlighted that LINK also fell with the market, plunging to $5 and posting losses of around 85% from its all-time high set in 2021.
Regarding XRP, Zala also pointed out that it is another coin that has suffered heavy losses but managed to climb into the top 10 cryptocurrencies by market cap after LUNA went offline. “XRP is now the sixth largest coin by market cap, valued at $25 billion. Its price fell below EUR 0.4, a level last recorded in March last year,” Zala pointed out.
Regarding SOL and AVAX, Zala said that these coins are among the biggest losers, falling more than 50% in a week. “AVAX fell to 20 euros while trading above 60 euros in early May,” he said.
“SOL was trading just below EUR 90 in the first few days of May, but this week it has fallen to EUR 40. Despite the huge drop, SOL remains the eighth largest cryptocurrency by market cap, valued at around $17.7 billion,” Zala added.
Disclaimer: This material is intended as commentary on economic or market conditions and does not constitute financial analysis or advice. The analysis presented here corresponds to Bitpanda’s Country Manager in Spain and under no circumstances constitutes investment advice from Cointelegraph. Everyone must do their own research before investing and are responsible for their own decisions.
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